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Tether Withdrawals Top $10B

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Re: Tether Withdrawals Top $10B

#391

Post by [deleted] »

oh_sigh wrote: post #380
leokennis wrote: post #367

Earlier quoted context omitted.

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.

[deleted]

Re: Tether Withdrawals Top $10B

#392

Post by ProjectArcturis »

randomhodler84 wrote: post #373
ProjectArcturis wrote: post #353

Earlier quoted context omitted.

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 cann…

So, for crime then.

Re: Tether Withdrawals Top $10B

#393

Post by datadata »

Majromax wrote: post #286
datadata wrote: post #217

Earlier quoted context omitted.

> In theory, every single USDT in circulation could be redeemed at a moment's notice The easy way to protect against this is to not contractually promise instant redemption. I think this is what tether actually does, but I could not find a source. Regular savings account banks do typically do this, for example the bank has the right to ask for 7 days to honor a withdrawal. If you are tether and your asserts are in bo…

> If you are tether and your asserts are in bonds that mature in under N days, then you could just promise redemption within N days to eliminate bank run risk. I don't think that's reasonable for Tether, at least not with a bulletproof N. I can't quickly find any specific redemption guarantee, but their March reserves report notes that their US Treasuries (the largest single claimed category) can have maturities up t…

Agreed, I think N would have to be too high to depend on this entirely, and high N looks a lot like insolvency. But it could still buffer against a partial bank run.

Re: Tether Withdrawals Top $10B

#394

Post by gregable »

munificent wrote: post #370
ProjectArcturis wrote: post #198

Earlier quoted context omitted.

What could you do with a USD stablecoin that you can't do with a regular old dollar? Other than let everyone see your transactions and account balances.

Don't forget: waste tons of energy, dump tons of carbon into the atmosphere, and generate tons of e-waste from fried GPUs.

This really only applies to POW coins, not so much stablecoins

Re: Tether Withdrawals Top $10B

#395

Post by rglullis »

cuteboy19 wrote: post #377
rglullis wrote: post #372

Earlier quoted context omitted.

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.

Iron was explicitly under-collaterized, and it was also trying to lure stakers by providing yield-farming. DAI is the opposite, stakers pay the stability fee to open a vault.

It did have a yield-farming component (you could mint DAI at 1% fee and put it in the DSR that would pay 2%), but that got completely knocked out in 2020. That crash was already a quite expensive lesson (tens of millions USD) for the MakerDAO team, and a lot of the investors had accepted a haircut in order to bring DAI back to the peg.

To repeat: I am not saying that DAI is bullet-proof. What I am saying though is that all the reasons you are using to make your case do not apply to DAI as it currently works.

Re: Tether Withdrawals Top $10B

#396

Post by nl »

optimalsolver wrote: post #344
TameAntelope wrote: post #170

Earlier quoted context omitted.

My understanding is that while USDT isn't this $1:$1 ratio you describe, other stablecoins are, specifically USDC. So what you're describing does exist, but isn't what USDT is. IMO the infatuation with USDT has always confused me a bit; why would anyone use USDT over USDC in the first place?

USDC hasn't been audited either, so how would we know that?

USDC has monthly "attestations" of their assets. This is less than an audit but it isn't nothing: https://www.centre.io/usdc-transparency

I don't think even banks do monthly external audits.

USDT does quarterly external reports: https://tether.to/en/transparency/#reports

Re: Tether Withdrawals Top $10B

#397

Post by sudosysgen »

jameshart wrote: post #383
sudosysgen wrote: post #360

Earlier quoted context omitted.

What prevents you from only selling the coins to US citizens with full KYC? Wouldn't that be enough?

Because the very purpose of a stablecoin is that one person buys the stablecoins with real USD; okay, you can KYC with them. But then once they have those stablecoins they go off and use them - to pay someone else for something - like some Bitcoin or something. Possibly something illegal. This is not someone you have a direct relationship with. And now those stablecoins ‘belong’ to that new person. Then that person u…

Agreed, but as long as the people you interact with are above board, it's on them if they use it wrong, no? You could make the same argument for physical treasury bonds, or gift card codes, or generally any interaction with crypto currency, but I don't see any bank having an issue with that.

Re: Tether Withdrawals Top $10B

#398

Post by datadata »

ncallaway wrote: post #315
LatteLazy wrote: post #261

Earlier quoted context omitted.

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.

I think there is just no way you could have a traditional bank provide the capabilities that tether provides. It acts like a bank, but it certainly does things that banking regulations to not actually regulate, and there is no way tether would have been granted a bank charter. Like it or not, waiting for regulation is not a way to build something that is new. As for forgiveness, not for permission.

Re: Tether Withdrawals Top $10B

#399

Post by rglullis »

hihihihi1234 wrote: post #361
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…

I don't follow crypto stuff closely, so maybe this question has a laughably obvious answer, but: what's wrong with Binance?

Politically speaking, Binance is too tied to China.

Business-wise, Binance made its fame by shitting on Ethereum and its developers, and then copying every innovation they could while completely eliminating all the valuable aspects of decentralization. The Binance Chain is not really decentralized, which means that they can censor participants or revert transactions. They kept all the bad parts of blockchain tech, but none of the ethics.

Re: Tether Withdrawals Top $10B

#400

Post by horsecabletruck »

Group_B wrote: post #366
horsecabletruck wrote: post #363

Earlier quoted context omitted.

Crypto does not need to replace all financial activity. But it may be used in place of some activity, and opens up some new use cases that we did not have before. Somebody can purchase their coffee with fiat and their NFT (which may be an ENS domain) with an ERC20. Take decentralized escrow, which underpins auctions, crowdfunds, markets, atomic swaps and more: it does not require a private third party. Most tradition…

You’re gonna use nft’s as your example for a crypto use case?

ERC721 is a great example. A group of people defined an open source standard, and then a variety of clients began to support and build on top of it. It is now a multi billion dollar industry shaking up the art world.

If you think you can write a better spec for a transferable non-fungible record of ownership, like a domain name asset, that works across any EVM blockchain, go for it. It’s an open system, hence why other specs like ERC1155 exist and find traction to meet different needs.

These kinds of open source and decentralized standards and protocols is also what gave us the web. It is valuable to have a system that is built on open protocols rather than a closed and highly permissioned infrastructure.

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