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Tether Required Recapitalization in May 2022

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Re: Tether Required Recapitalization in May 2022

#291

Post by runarberg »

zionic wrote: post #122
JumpCrisscross wrote: post #50

Earlier quoted context omitted.

> whether Tether is fully collateralized ultimately doesn't matter. As long as there are well-capitalized parties (Bitfinex, other exchanges) that want to prop up Tether, it will be fine This is true for every pile of toxic crap that's ever been financially engineered. The problem is the entangled financial health of the backer (in this case, Bitfinex and other crypto exchanges) with the backee (Tether). If creditors…

>This is true for every pile of toxic crap that's ever been financially engineered. I have a radical idea that I'm fairly sure would get me killed if I ever stood a chance of implementing it: A complete ban on all non-productive financial schemes. We have an entire parasite class that grown unfathomably wealthy while providing no real value to the rest of society. The "futures trader" extracting value from the system…

I would really like to know what would happen if—in a wave of international solidarity between all the workers in the world—workers would take their profits in their own hands and away from any shareholder and overpaid non-contributing CEOs. What would happen to all these markets.

Would a company controlled by their own workers choice to funnel parts of their profits to wall street traders? Probably not. Would there be any money to be gained on the stock market in such an environment? Probably not.

So a natural question to ask then is. What value is there in the stock market which does not rely on money being siphoned away from workers?

Re: Tether Required Recapitalization in May 2022

#292

Post by cinquemb »

JumpCrisscross wrote: post #139
Grimburger wrote: post #131

Earlier quoted context omitted.

Suggest a better methodology crisscross, I'm happy to listen. The problem with $1 flat is that anyone can sign up and manipulate it over time, holding it a fraction of a cent under isn't hard for a moment each day. Constantly maintaining a few cents under each day is much, much harder, feel free to go look through historic charts of what it costs to sell tether for USD over the last few years. All it takes is a few d…

> holding it a fraction of a cent under isn't hard for a moment each day It shouldn't be. Not for a dollar-pegged asset. Fractions of a cent on billions of dollars, dollars easily lent and borrowed every day, every minute, is millions of dollars a year for an arbitrageur [1]. Hundreds of billions of dollars are deployed into funds exploiting smaller differentials on rates and futures curves. > what patio11 has said w…

> Hundreds of billions of dollars are deployed into funds exploiting smaller differentials on rates and futures curves.

Legally, IRDs and futures trade/settle on a few centralized exchanges with maybe one CCP (at least going by clarusft numbers on monthly dv01 volumes [some products way trade more on different venues compared to others], esp compared to all the places USDT trades) with many times rehypothicated US treasuries or other gov bonds behind it all, scheme blows up occasionally (was fun watching 30 year UST's trade ~30 bps under 75% of SOFR txs for a month before sept 2019 'surprise' fireworks happened).

> … buy one billion Tether

With no slippage/spreads on dex's or cex's to be able to do this with any stablecoin? Pipe dream. Maybe you can market make over the course [unknown amount] of time and pick it up on cex/dex's at/under $0.9989, but good luck trying that everyday (esp on chain where you will need to split that over many address all the time or addr tracking algos will front run if the MEV bots dont get you on every tx).

Shit show all around, ones just more concealed from the public and "regulators" than the other…

Re: Tether Required Recapitalization in May 2022

#293

Post by steveBK123 »

tonguez wrote: post #234
steveBK123 wrote: post #156

Earlier quoted context omitted.

I propose a ban on all non-productive trips by car. Only good people should be allowed to emit carbon unless for productive reasons that pass the carbon threshhold for the amount of carbon the trips will emit. Good people as defined by a social credit system. I will decide what is a productive reason & what is the carbon threshhold! People totally have the option of living under this type of government - it exists in…

“People totally have the option of living under this type of government - it exists in top down centralized places like China.” you’re right, i much prefer to live under a decentralized government like the United States.

This is one of the benefits of the federal / state divide in the US too. If you are worried about the other side being crazy, you can live in a state that solidly on your side of the aisle, and be insulated from when the other side is in power at the federal level.

Re: Tether Required Recapitalization in May 2022

#294

Post by jeffdn »

ClumsyPilot wrote: post #184
jeffdn wrote: post #150

Earlier quoted context omitted.

They still have the ability to put nuclear warheads anywhere on the globe, by virtue of their ballistic missile submarines and the nuclear warheads those ballistic missiles carry. The Trident D5 missiles have a range of more than 7,500 miles, and the submarines move. That, in and of itself, is worth a lot -- potentially even more than having a large military.

'They still have the ability to put nuclear warheads anywhere on the globe' I think most of UK public would consider that a prime minister that plans using nukes in offensive capacity belong in a padded cell.

I completely agree, I was just responding to the parent commenter's assertion that the UK didn't have the offensive power to have "exorbitant privilege"

Re: Tether Required Recapitalization in May 2022

#295

Post by rednerrus »

Grimburger wrote: post #243
houston_Euler wrote: post #126

Earlier quoted context omitted.

I'll take that bet. But you need to put up the $5,000 first. So you don't think you're just losing money, I'll issue you $5,000 worth of my personal stablecoin that you can redeem 1:1. If you win, I'll give you another $5,000 of my personal stablecoin to pay the bet. You can redeem them whenever you want, I'll be good for it. /s

Quoted post unavailable.

I'll take $20 of this action.

Re: Tether Required Recapitalization in May 2022

#296

Post by meirelles »

phphphphp wrote: post #95
meirelles wrote: post #55

silly question, being USDT "only" 80B, why does it matter if it collapses? considering cryptos market cap is more than 1T, and 100B's wipeouts routine, sometimes during crypto winters (where we observe -80% across the board) or collapses such as Luna recently (>50B? no idea) Of course, panic would happen, but still. I think people would move on, forget, and continue believing whatever they want to just curious to rea…

Market cap is not the sum of all injected capital, it’s the total supply multiplied by the most recent value of a unit. For example, if you paint 2 paintings and sell them to me for $100 each, and then I sell 1 of them for $1000 to a third-party, the market cap of your paintings is $2000 ($1000 x 2 paintings) despite there only being $1100 dollars spent. It’s plausible that there’s less than $80bn of USD in the crypt…

Even though the actual figure is unknown it still a fair argument, thanks

Re: Tether Required Recapitalization in May 2022

#297

Post by Barrera »

> This essay makes some confident claims about the future and I wish to have cryptographic proof that I did not edit those claims between now and when they inevitably come to pass.

The only unconditional claim I saw was that Tether will lie again. Am I missing something?

This one is a bit more interesting:

> Tether originally promised to back the reserves with cash in a bank account. This was a lie. It was a well-chosen lie, because the value of cash does not routinely fluctuate. Backing a fixed liability with volatile assets and a wafer-thin equity cushion would have the predictable result of causing the liabilities to become unbacked in many stressful situations for any of the backing assets.

What's interesting is that I'm not sure many banks would want to hold the cash, regardless of the source.

When a bank receives cash deposits it has to do something with it. The money doesn't sit as bank notes in a vault.

The bank has a problem. The cash becomes its own liability. The depositor can withdraw the cash at any time and the bank needs to fulfill that obligation. And a lot of cash means a lot of obligation. So the bank desperately wants to turn the cash liability it faces with a deposit into an asset (i.e., somebody else's debt).

How do do that?

Banks are highly regulated on this point, especially post-GFC. There aren't a lot of options. What they'd like to do is issue loans to high-quality borrowers at profitable rates. But if the quality of borrow is going down the tubes (it is) and interest rates are at historic lows (they were), they would rather not do that.

Treasuries are an option. But the demand for short-term treasuries has been so intense that yields have been driven down to absurd levels relative to other instruments.

All of which is to say that the very idea of a US dollar-backed "stable" coin may not be possible for any entity other than the US Federal reserve or the Treasury.

And this defeats the entire purpose for Tether holders. They can already park cash at a bank. They hold tether to be out of the US banking system jurisdiction.

Re: Tether Required Recapitalization in May 2022

#298

Post by ZephyrBlu »

eis wrote: post #288
ZephyrBlu wrote: post #281

Earlier quoted context omitted.

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 b…

Patrick refused because other people were offering worse odds...

Re: Tether Required Recapitalization in May 2022

#299

Post by vagab0nd »

TameAntelope wrote: post #279
drexlspivey wrote: post #265

Earlier quoted context omitted.

No it's not, if you think pegs are supposed to stay forever at the same price you don't understand how markets and order books work.

I very much don't understand how markets and order books work, but people who do understand those things tell me pretty consistently how big of a deal it is when a money market fund loses its peg, even by a tiny amount.

Define "tiny". Is 0.1% tiny? 0.01%? 0.001%?

USDT maintains its peg by allowing certain entities to redeem USDT 1 to 1. How much USDT's price fluctuates depends on how well that mechanism works, and market conditions.

Re: Tether Required Recapitalization in May 2022

#300

Post by sizzle »

JumpCrisscross wrote: post #50
axg11 wrote: post #12

The most important point in this article is that whether Tether is fully collateralized ultimately doesn't matter. As long as there are well-capitalized parties (Bitfinex, other exchanges) that want to prop up Tether, it will be fine. Nobody should be under the illusion that Tether is decentralized or anything other than a bet on Bitfinex.

> whether Tether is fully collateralized ultimately doesn't matter. As long as there are well-capitalized parties (Bitfinex, other exchanges) that want to prop up Tether, it will be fine This is true for every pile of toxic crap that's ever been financially engineered. The problem is the entangled financial health of the backer (in this case, Bitfinex and other crypto exchanges) with the backee (Tether). If creditors…

Just like when we put it all into Anchor protocol via UST, that worked out great
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