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Tether Required Recapitalization in May 2022

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Re: Tether Required Recapitalization in May 2022

#281

Post by ZephyrBlu »

eis wrote: post #246
patio11 wrote: post #166

Earlier quoted context omitted.

Given that the other crypto people offering “keep me honest” bets are offering 5:1, 10:1, and 25:1, on better terms, no, that’s not interesting, but I’ll write you a free option to laugh about me over the Internet if it turns you you’re right.

Asking for 5, 10 or 25 to 1 odds in your favor means you are expecting at least 20%, 10% or 4% chance that you are right. The fact that you don't want to engage in 1:1 odds means you are less sure of your own position than he is. Just sayin' :)

Why does it mean that? If I'm 50% sure an event will occur, but someone will offer me worse odds than that (I.e. better payout) why would I take 1:1 odds?

Re: Tether Required Recapitalization in May 2022

#282

Post by Grimburger »

thorncorona wrote: post #269
Grimburger wrote: post #243

Earlier quoted context omitted.

Quoted post unavailable.

> Are any of you willing to back up any of these bold sentiments with actual money? Or are you just like the rest? All words, no soul? If you are so sure of this then let us make a Real bet. 50 million sounds good yes? And if you don't have 50 million we can simply bet your entire net worth.

It's a real offer and am willing to part with it if I'm wrong. Please don't make a mockery of it

I am happy enough with what was proposed and am not being facetious, was wagered directly to the person who wrote the article a few others after that.

Don't see anyone daring to take up the challenge, just low effort and frankly low-tier commentary that doesn't belong on this website in response. I will offer it to you as well since you seem keen. Any amount up to $5000 USD.

It's not much in the scheme of things to prove oneself right yes? I'm happy to have it all donated to charity which you can claim as tax deductible if that so pleases. Or are we not even talking about Tether anymore and just something else, something deeper that lurks within the unsettled anger of all these comments?

Re: Tether Required Recapitalization in May 2022

#283

Post by tyrfing »

runarberg wrote: post #273
tyrfing wrote: post #236

Earlier quoted context omitted.

Loans.

Yeah, that still doesn’t make sense. If that were to be sustainable you would have charge higher interest on the loans then you give to savings. That means a customer has the potential of getting a loan in an alien currency which they’d have to sell to USD, and then buy some more of that alien currency to pay it back with much higher interest then if they would have just gone to a bank/credit union/loan agency. These…

> If that were to be sustainable you would have charge higher interest on the loans then you give to savings.

Which is exactly how protocols like Compound work, although 'governance tokens' are also issued simply for using the system.

> These DeFi yields must be funded in other ways than just loans.

Which? DeFi stands for Decentralized Finance, which pretty much means the rules are easily available - as long as you talk about a specific example, not spherical cows.

Re: Tether Required Recapitalization in May 2022

#284

Post by rglullis »

SilasX wrote: post #278
rglullis wrote: post #275

Earlier quoted context omitted.

It's not about the "concerns" that we should be worried about. We should also be worried about not perpetuating a gigantic scam. Honesty is not just about "I wasn't the one profiting from the bad thing". It's also "I'm willing to call evil/immoral for what it is".

I don’t consider being slightly undercollateralized a “gigantic evil scam” and the rhetoric around Tether is still definitely overblown, and if that were your primary concern (or am I not supposed to say that anymore?), you should have led with it rather than comparing it to similar defi returns.

No. USDT undercollaterization is not my primary concern: https://news.ycombinator.com/item?id=31451820

And I wasn't comparing in terms of returns. I just pointed out that there is no real use-case for USDT that can't be served by the other tokens, including yield-farming in liquidity pools.

Re: Tether Required Recapitalization in May 2022

#285

Post by im3w1l »

hathym wrote: post #229
zmgsabst wrote: post #109

Earlier quoted context omitted.

No, 1-1 backing prevents this. Let’s imagine that I have 1000 cans of beer in my warehouse and I give out 1000 tickets to exchange for a beer. Let’s further imagine you have infinity dollars to “break the peg”. So you buy tickets, trade tickets, give them away for free after re-buying them… doesn’t matter. As many times as you want. Everyone who has a ticket at the end can still visit my warehouse to claim a beer — n…

you can't make a profit like that. banks (and tether) make profit by miniting news tickets out of thin air, lending the newly minted tickets at a certain rate, once the credit is reimbursed they usually destroy the minted tickets and keep the profit.

$1 buys one tether. One tether redeems for $0.999. Then there's also interest on T-bills and stuff.

Re: Tether Required Recapitalization in May 2022

#286

Post by DebtDeflation »

lottin wrote: post #244
DebtDeflation wrote: post #208

Earlier quoted context omitted.

>whether Tether is fully collateralized ultimately doesn't matter There's a nuance here. If Tether IS full collateralized, then it does not matter since a run on Tether is by definition impossible. If Tether IS NOT fully collateralized then it may or may not matter depending on the size of the run and the ability of Bitfinex etc. to contribute capital.

Full collateralisation isn't enough to rule out a run on USDT, since the value of the collateral can vary depending on market conditions. We can be certain that one USDT will always be redeemable for one USD, as long as USDT is fully backed with USD, but we already know from the attestations this is not the case.

Right, I'm assuming collateralization by bank accounts, money market accounts, and short term Treasuries. Not commercial paper issued by Binance and Bitfinex.

Re: Tether Required Recapitalization in May 2022

#287

Post by scatters »

ceeplusplus wrote: post #226
robertlagrant wrote: post #225

Earlier quoted context omitted.

The person you're replying to was talking about futures traders. Where did you get a rich guy's son from?

Speculating on futures and other derivatives is basically what those rich guy's sons are doing in their hedge funds. Most hedge funds get worse returns than the S&P 500.

Getting worse returns than the S&P 500 is still valuable, if those returns are uncorrelated.

Re: Tether Required Recapitalization in May 2022

#288

Post by eis »

ZephyrBlu wrote: post #281
eis wrote: post #246

Earlier quoted context omitted.

Asking for 5, 10 or 25 to 1 odds in your favor means you are expecting at least 20%, 10% or 4% chance that you are right. The fact that you don't want to engage in 1:1 odds means you are less sure of your own position than he is. Just sayin' :)

Why does it mean that? If I'm 50% sure an event will occur, but someone will offer me worse odds than that (I.e. better payout) why would I take 1:1 odds?

Because that is not what happened. Grimburger did not offer (from his point of view) worse odds than 1:1. And patio11 refused 1:1 because it was apparently not interesting to him.

Now one could take that as a salesmans tactic to try and extract better odds from Grimburger but at that point the monetary aspect would become the focus and not the wager itself. A wager between two people who are in it for the sport and both sure of their positions should carry 1:1 odds. One could ask for a lower amount or refuse completely on monetary grounds but not request odds in ones favor.

Re: Tether Required Recapitalization in May 2022

#289

Post by clairity »

JumpCrisscross wrote: post #200
randbox wrote: post #176

Earlier quoted context omitted.

> There is a middle ground between banning and a free for all. Providing basic banking as a public utility so most deposits by individuals, local governments, and small businesses are not stored with investment banks engaged in speculation. Public banks can be limited to originating loans on 100% security of material personal property such as crops, livestock, cheese, gold, lumber, steel and prohibited from originati…

> banks can be limited to originating loans on 100% security of material personal property such as crops, livestock, cheese, gold, lumber, steel The problem isn't getting loans on one's crops. It's transferring the price risk to someone better able to bear it. Farmers want a guaranteed profit when they plant. Loans don't address that. Futures do. (It's why they were invented, in the 17th century, by the Dutch and Jap…

futures don't guarantee a profit, only a price. it's up to the farmer to decide whether the price is worth the planting (regardless of profit). and the pricing function only works well in an uncorrupt market.

the problem isn't the existence of the futures markets, but the same kind of over-consolidation that corrupts every laissez faire market, making them inefficient and brittle in the long-run. if regulation encouraged primarily mid-sized firms, rather than a few large ones, we'd have better informed and more efficient markets, albeit less lucrative since the firms wouldn't have undue (read: corrupting) influence.

note that insurance is another alternative to futures or gov guarantees, though i'd question the need to externalize risk, which manifests a critical market-shaping signal.

Re: Tether Required Recapitalization in May 2022

#290

Post by runarberg »

tyrfing wrote: post #283
runarberg wrote: post #273

Earlier quoted context omitted.

Yeah, that still doesn’t make sense. If that were to be sustainable you would have charge higher interest on the loans then you give to savings. That means a customer has the potential of getting a loan in an alien currency which they’d have to sell to USD, and then buy some more of that alien currency to pay it back with much higher interest then if they would have just gone to a bank/credit union/loan agency. These…

> If that were to be sustainable you would have charge higher interest on the loans then you give to savings. Which is exactly how protocols like Compound work, although 'governance tokens' are also issued simply for using the system. > These DeFi yields must be funded in other ways than just loans. Which? DeFi stands for Decentralized Finance, which pretty much means the rules are easily available - as long as you t…

I’m sorry but I’m still confused. Who are the people taking these inconvenient, unoptimal and expensive loans, when they can get better and cheaper loans through traditional means? Something doesn’t smell right.

Also ‘governance tokens’? This smells like another term for “money from new users entering the system”. Which is precisely how Ponzi schemes work.

EDIT: I went on a little scouting mission on google (well DDG actually) to find out if I could borrow some USDT on the Compound and how much it would cost me. But I mostly came across articles explaining how you could make money by doing the opposite (buying Tether and lending it), and numerous dashboards with all sorts of hard to understand data with the prices of various cryptocurrencies and some rates I couldn’t understand. I suspect that the only people borrowing USDT are actually also speculators that are invested in the cryptocurrency market (perhaps they are trying to short it).

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