Tether Withdrawals Top $10B • Hacker News Board

Re: Tether Withdrawals Top $10B

#371

Post by DANK_YACHT » Tue, May 24, 2022, 10:23 PM UTC

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"

This point always comes up, and it typically shows a lack of knowledge about what you can do with a smart contract. E.g. with a smart contract, you can implement an option on anything and sell the option to a counter party with very little work. How would you do that without a blockchain? One way would be to sell an option on a listed security through your brokerage, but the blockchain democratizes this ability and makes it so anyone can do it for a different set of assets then would otherwise be possible.

Like why have digital banking infrastructure at all? What new thing was enabled by digital banking infra? The answer is that nothing new was enabled, but the tech made banking operations faster and more accessible to more people. The same thing applies to blockchain tech.

Re: Tether Withdrawals Top $10B

#372

Post by rglullis » Tue, May 24, 2022, 10:28 PM UTC

cuteboy19 wrote: post #340

rglullis wrote: post #330

Earlier quoted context omitted.

DAI has multiple assets, the vaults are at 150% at a minimum and independent from one another and, most importantly, there is no one offering 20% APR on staked DAI. It already went through worse crashes than UST did and it managed to recover. It's far from perfect, but it is certainly more resilient and has shown to be able to pass the Lindy test.

>DAI has multiple assets, And so did Terra. They held AVAX, BTC, LUNA and a little bit of USDC. >150% at a minimum And for Terra this was 100% at a minimum. It makes 0 difference. >independent from one another Cryptocurrency are extremely correlated. >it managed to recover UST itself had recovered from a previous depeg event

You know what is missing on your list? The 20% APR staking ponzi!

You keep pointing out the similarities, maybe it would help to realize that the problem was in the difference?

Re: Tether Withdrawals Top $10B

#373

Post by randomhodler84 » Tue, May 24, 2022, 10:29 PM UTC

ProjectArcturis wrote: post #353

randomhodler84 wrote: post #328

Earlier quoted context omitted.

“But without permission”. Shittier might be acceptable if you do not wish to seek permission. Which is the whole point.

So, for crime? Like, what is the legitimate use-case where not needing permission is the defining requirement?

We do you need to seek permission by default to save, spend and transact over the internet? Do we need permission to send TCP packets? To send an email?

Consider that the internet works because it is permissive in what it accepts. What if money was abstracted from the states monetary policy, and it was as frictionless as any other internet protocol. The internet experiment changes our lives every day, in ways we cannot fathom.

Re: Tether Withdrawals Top $10B

#374

Post by SilasX » Tue, May 24, 2022, 10:36 PM UTC

TuringNYC wrote: post #364

drumhead wrote: post #64

We're in the get out while you still can phase. At some point they'll suspend conversion and holders will be stuck with something virtually worthless. It's like watching a landslide in its early stages, as soon as enough people realise what's going on it's going to be too late.

I know in the equities, forex, and other traditional markets, these things are all force-arb'd by arbitrageurs forcing the cycle. So is that possible here? Forgive my ignorance here, but how do i short Tether here?

If there is another stablecoin you trust, you can do it via defi:

https://news.ycombinator.com/item?id=31495496

Re: Tether Withdrawals Top $10B

#375

Post by function_seven » Tue, May 24, 2022, 10:37 PM UTC

jakelazaroff wrote: post #172

lupire wrote: post #160

Earlier quoted context omitted.

That's no problem at all. The person who bought the Bitcoin / sold the Tether loses , but that doesn't affect USDT.

The person who bought the Bitcoin and sold the USDT is the Tether organization itself. Here’s the same example, stated more explicitly: 1. I buy 10 USDT from Tether in exchange for $10 worth of Bitcoin. Tether now has 1:1 reserves of Bitcoin backing USDT. 2. The price of Bitcoin decreases by 50%. Tether no longer has enough reserves to cover all the USDT in circulation. 3. I want to sell my 10 USDT back to Tether and…

Why not have a step between #1 and #2? "Tether immediately sells the BTC for $10"

There's still some risk if the price is rapidly moving and they can only get $9.99 for the BTC you sent them, but that could be mitigated by ordering the transactions to keep the peg: you send $10 of BTC, they sell it (and "only" get $9.99), they give you 9.99 USDT and say, "tough, what you thought was $10/BTC was really $9.99/BTC"

Re: Tether Withdrawals Top $10B

#376

Post by Spivak » Tue, May 24, 2022, 10:41 PM UTC

hiq wrote: post #355

boc wrote: post #300

Earlier quoted context omitted.

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…

> If USDT dies then BTC goes to like $500 on Binance. Do you just mean that confidence will be so low that people will try to shun cryptocurrencies and dump their positions, or are you talking about another mechanism?

No, literally. The price of lots of coins is specified in USDT on lots of exchanges so if USDT crashes then the price of coins relative to USD also crashes.

Now, would there be lots of manual intervention by exchanges to fix this as fast as possible, absolutely but that's the parents point.

Re: Tether Withdrawals Top $10B

#377

Post by cuteboy19 » Tue, May 24, 2022, 10:46 PM UTC

rglullis wrote: post #372

cuteboy19 wrote: post #340

Earlier quoted context omitted.

>DAI has multiple assets, And so did Terra. They held AVAX, BTC, LUNA and a little bit of USDC. >150% at a minimum And for Terra this was 100% at a minimum. It makes 0 difference. >independent from one another Cryptocurrency are extremely correlated. >it managed to recover UST itself had recovered from a previous depeg event

You know what is missing on your list? The 20% APR staking ponzi! You keep pointing out the similarities, maybe it would help to realize that the problem was in the difference?

Iron/Titan did not have any such high apy and still collapsed. In case of terra, I concur that the driving force was the Anchor ponzi, but it was the mechanism that failed.

Re: Tether Withdrawals Top $10B

#378

Post by Havoc » Tue, May 24, 2022, 10:48 PM UTC

jazzyjackson wrote: post #247

Havoc wrote: post #130

More importantly how is 70B still in it… Not opposed to crypto in general but tether always struck me as rather questionable even pre Luna Tera collapse

perhaps the 70B only exists denominated in USDT - ie, the only people not pulling money out are people who never put money in and by people i mean exchanges who benefit from the printing of counterfeit dollars

They could easily pull it out against real USD though. So if some of it is ahem fake that person knows for sure it isn’t backed by real assets and should be running for the exits first.

On that basis I’m inclined to believe the majority of the 70B is real. And really do t get what that gang is thinking to stay in

Re: Tether Withdrawals Top $10B

#379

Post by sbf501 » Tue, May 24, 2022, 10:51 PM UTC

shadedtriangle wrote: post #218

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…

> All you need for a stable stablecoin is to save every dollar put in to it. That’s the issue right there. How does Tether save its dollars? We can see it in their transparency report[1]. Whether you believe them or not it’s not just cash in a bank account. * 0.41% Non-U.S. Treasury Bills * 55.53% U.S. Treasury Bills * 0.15% Reverse Repurchase Agreements * 5.81% Cash & Bank Deposits * 9.63% Money Market Funds * 28.47…

I read that selling off commercial paper can impact just about everything because it is used extensively between banks. I don't quite understand it, but apparently this is how crypto came to impact the stability of other markets; through buying and selling huge amounts of commercial paper and impacting its price. I'd like to understand that better, if anyone feels like writing an ELI5.

Re: Tether Withdrawals Top $10B

#380

Post by oh_sigh » Tue, May 24, 2022, 11:05 PM UTC

leokennis wrote: post #367

oh_sigh wrote: post #317

Earlier quoted context omitted.

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.

Okay so how can you have a payment system where: - Transactions are on a decentralized blockchain - That blockchain is however not public - That blockchain allows for high(er) TPS - That blockchain isn’t vulnerable to easy fraud Am I missing a trade-off here?

Yes - you're missing "mathemagic" :) And a variety of independent engineering solutions which are largely independent of the mathemagic(think sharding or something like the lightning network).

Check out ZCash for an example of non-public, decentralized block chain.