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Tether Withdrawals Top $10B

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Re: Tether Withdrawals Top $10B

#311

Post by amanj41 »

robonerd wrote: post #234
horsecabletruck wrote: post #213

Earlier quoted context omitted.

Many things. A stablecoin that implements ERC20 interface can be used across Ethereum ecosystem and it’s smart contracts. You could even program your own smart contracts around the token, such as to setup a time lock or auction. Examples: converting it to another token on a decentralized exchange, purchasing an NFT, holding the token in a non-custodial wallet, holding the token in a multi-signatory wallet, participat…

Most of these are just "do a thing you can already do with money, but shittier"

I would guess that you have never been made to remit money to someone living in a different country. There are multiple uses for a CBDC but this one is a low hanging fruit example. I have had headaches doing because of existing infrastructure. Wire fees + exchange fees

Re: Tether Withdrawals Top $10B

#312

Post by rglullis »

cuteboy19 wrote: post #242
rglullis wrote: post #121

Earlier quoted context omitted.

Fiat-backed, collaterized stable coins that are better than USDT - USDC (Circle USD) - GUSD (Gemini USD) - BUSD (Binance USD) - EURS (Stasis EUR) Crypto backed (overcollaterized) stable coins that are soft-pegged and better than USDT - DAI (MakerDAO) - sUSD (Synthetix USD) - sEUR (Synthetix EUR) No one needs USDT anymore. The fact that even Binance gets more credibility than Tether should tell you how scammy the peop…

If this was two weeks ago you most certainly would have included UST at the top of this list. People reading this should definitely question the other ones on the list as well. what proof do we have that the rest of these coins are really stable?

No. I wouldn't. Never used Terra, and I already said here that I never understood these "algostables" with no collateral.

As for "proof", you should've learned already that there is no such thing as "proof" with any of them. It's all about risk. For the fiat backed, the risk could be measured by the trustworthiness of the institution behind it and how they are managing the real fiat they have in hand. I'll risk them of my list if I hear that any of them is doing any kind of shady (we are collaterized by other assets that are not money) like Tether.

DAI and synths also have a non-zero chance of catastrophe, but at least this is mitigated by the over-collaterization. Synthetix requires something like 6x the SNX for each sUSD you can mint and their governance was not afraid to increase this requirement (and consequently reduce their sUSD supply) when their token went down.

Re: Tether Withdrawals Top $10B

#313

Post by dsomers »

giaour wrote: post #285
WinstonSmith84 wrote: post #278

Earlier quoted context omitted.

Tether, or rather Finex is a famous MM. Don't worry too much about their "other investments", they are up a lot no matter BTC price. Tip of the iceberg https://bitinfocharts.com/bitcoin/wallet/Bitfinex-coldwallet Also, you're going with the assumption they shall be able to redeem 100%. Crash happens, like we have seen, but everyone cashing out their USDT is not a scenario going to happen. Or if you want to account fo…

> but everyone cashing out their USDT is not a scenario going to happen Didn't bankers say something similar in 1928?

If I recall correctly, the stock market _only_ lost 90% of its value during the crash that proceeded the Great Depression.

Re: Tether Withdrawals Top $10B

#314

Post by woeirua »

boc wrote: post #300
cowtools wrote: post #227

Earlier quoted context omitted.

I don't know if it will necessarily cause crypto prices to crash

Crypto is priced on the exchanges in terms of USDT, USDC, etc. If USDT dies then BTC goes to like $500 on Binance. The cascade effects will cause runs on other exchanges, and then you're betting that they have enough reserves to cover a run. I'd want to be far away from the scene when that happens. The fiat banking system is backstopped against this behavior by the FDIC, which guarantees your funds are safe even if t…

Yep. A good old 19th century bank run, happening at the speed of light around the world simultaneously. It truly will be breathtaking how fast the entire crypto ecosystem will implode. I fully expect that when the dust settles multiple banks will be bankrupt and have to be bailed out too.

Re: Tether Withdrawals Top $10B

#315

Post by ncallaway »

LatteLazy wrote: post #261
jcranmer wrote: post #256

Earlier quoted context omitted.

> What if the value of those assets is already below 1:1 because of recent market events? The statistics you're bringing up are as of March 31. Do note that 6% of reserves are in "Other Investments (including digital tokens)", and Bitcoin (as a proxy for all cryptocurrencies) is down ~30% since then, so that's at least 2% of their assets that have been wiped out by market conditions. Keep in mind that said report als…

They only need to have made 2% on those other investments and the 2% lost on crypto is irrelevant. Also, if 2% of outstanding tether has been lost (forgotten wallet keys etc) then those can never be redeemed and again, tether wins. Inflation is another factor worth considering here: tethers deposits are deminishing but it's investments are (or should be) shielded. I think people fail to notice how similar a (non-frau…

> I think people fail to notice how similar a (non-fraud) tether model is to a traditional bank

That’s exactly what’s unethical about it. They’re operating a bank, but have skipped all the regulations and oversight that banks operate with.

I have no issue with Tether operating a fractional reserve deposit system, if they are subject to the same oversight (and insurance) that banks are subject to.

Re: Tether Withdrawals Top $10B

#316

Post by initplus »

X6S1x6Okd1st wrote: post #275
alasdair_ wrote: post #133

Earlier quoted context omitted.

I wonder how easy it is to actually short Tether assuming the likely scenario where USDT goes the way of UST and trading is effectively halted. How does one cover their short when no trading is possible? In a regular exchange, there are rules about how to handle this but I'm not clear how it happens with crypto.

UST trading only halted on some centralized exchanges. If you are willing to expose yourself to DeFi then trading continued. You can short USDT on AAVE for 3% APY at current variable rates.

The actual UST blockchain was halted for a time.

Re: Tether Withdrawals Top $10B

#317

Post by oh_sigh »

leokennis wrote: post #308

I know it’s probably too simplistic, but this interview really resonated with me: https://www.currentaffairs.org/2022/05/why-this-computer-sci... In all honesty I can see people being enthusiastic about crypto as a “get rich quick” scheme (at the expense of less fortunate people but soit) - but how people can see crypto as the future of money with a worldwide ~10 TPS throughput and every transaction on a public block…

The transaction limit and public-ness of transactions are implementation details of certain blockchains. There are blockchains with much better TPS, and blockchains where transactions are not public.

Re: Tether Withdrawals Top $10B

#318

Post by frgtpsswrdlame »

ineptech wrote: post #154

Someone help me understand this. All you need for a stable stablecoin is to save every dollar put in to it. The people behind Tether sell tethers for $1, they save all of those dollars, and whenever the price of Tethers drops to $0.99, they buy tethers until the price is back up to $1. As long as they never spend anything from the reserve, this can't fail no matter how unpopular the currency is - they can back the cu…

>The people behind Tether sell tethers for $1

This is the problem. I don't believe all the tethers were sold in exchange for $1. If Tether wasn't receiving $1 for every tether then everything else falls apart.

Re: Tether Withdrawals Top $10B

#319

Post by cuteboy19 »

rglullis wrote: post #312
cuteboy19 wrote: post #242

Earlier quoted context omitted.

If this was two weeks ago you most certainly would have included UST at the top of this list. People reading this should definitely question the other ones on the list as well. what proof do we have that the rest of these coins are really stable?

No. I wouldn't. Never used Terra, and I already said here that I never understood these "algostables" with no collateral. As for "proof", you should've learned already that there is no such thing as "proof" with any of them. It's all about risk. For the fiat backed, the risk could be measured by the trustworthiness of the institution behind it and how they are managing the real fiat they have in hand. I'll risk them…

But Terra did have collateral. Luna equal to 1 USD was burnt (more like locked) once a UST was minted.

The whole conceit of DAI is that instead of burning luna at a rate of $1 they would burn it at a rate of $1.5 , The mechanism is exactly the same! And it will fail in exactly the same way.

Re: Tether Withdrawals Top $10B

#320

Post by horsecabletruck »

woeirua wrote: post #309
horsecabletruck wrote: post #251

Earlier quoted context omitted.

Quoted post unavailable.

Decentralization is not a goal of the modern financial system. Indeed for many reasons, decentralization is not desirable, as crypto-bros are about to find out when Tether blows up and takes out 3/4 of the market.

Tether is hardly decentralized and it blowing up will not have impact on the network. Who cares if a high-risk stablecoin crashing takes out the market price of ETH so long as the chain continues to fill blocks and protocols like DAI, RAI and USDC continue to operate as intended.

> Decentralization is not a goal of the modern financial system.

Many people in the world do want a broader range of options than “fiat in centralized digital bank.” Even the HN crowd sometimes praises cash and its peer-to-peer and censorship-resistance attributes.

The ability to have a smart contract perform operations like atomically and trustlessly swapping two assets without human oversight is interesting. Maybe not to you, but to many users and industries.

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