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'things like Tether' - There are basically two of them. Tether and MakerDAO. MakerDAO has the advantage that it is designed so that you don't need to trust any
by lez 8y ago
'things like Tether' - There are basically two of them. Tether and MakerDAO.
MakerDAO has the advantage that it is designed so that you don't need to trust any human or organizational player. Just the crypto itself.
Tether can fall apart any minute. (e.g. when Tether executives play dirty)
- Animats 8y agoMakerDAO can fall apart, too. From their white paper: "If there is a sudden market crash in ETH, and a CDP ends up containing more debt than the value of its collateral, the Maker Platform automatically dilutes the PETH to recapitalize the system. This means that the proportional claim of each PETH goes down." There's a lot of obfuscation about both that and Tether, but the reality is that a big drop in the asset held for stabilization will break the stability. And the asset is some cryptocurrency, not gold or land or something with a track record. Tether at least claims they have dollars, but their auditors are not convinced.