4 ms·

They claimed 74% a while back IIRC, with the rest being in some unspecified combination of loans and other assets.

ineedasername 6y ago
That's the problem, they make claims but fail to provide evidence. If I want to execute a currency arbitrage strategy, I want to know what is backing the currencies. In most fiat currencies, you can do this by 1) Assessing the current economic conditions & the country's history of monetary policy. 1) evaluating the currency supply against the GDP: This is really what a fiat currency is actually backed by. (Or at least one of the fundamental components) You can't do this with Tether. A country's own economic reports and extensive external analysis by others can validate the financial state of a country & its fiat currency. With Tether, you have to take their word for it. And loans? Doesn't that contradict their entire premise-- Mint 1 Tether and sell it for $1 so it's always fully backed. Loans shouldn't be necessary. Loans could be called in the second Tether shows weakness, which would further destabilize it. And lets face it: If it's not actually fully backed $1 for $USDT then there's zero guarantee that it can't start floating against other coins or currencies. It's only worth $1 if you can find someone willing to give you $1 for $1 USDT. People claim if it loses value then Tether will simply buy up enough to drive the price back to the $1 peg. Buy it with what though? Their assets, the money backing it! which means it's then backed by even less! The only way a strategy of Tether buying the price back up to the $ peg can work at all is if Tether has more assets backing it that strictly necessary. As for other assets backing it, they'll go up & down in value too. Even if it's currently fully backed, without transparency those other assets backing it can go down in value and then all of a sudden it's not fully backed. All of these concerns might be moot. Tether might be completely sound, rock solid & stable. But anyone who believes that is taking it on faith based on the word of people who are highly biased & highly interested in having $USDT owners believe it, true or not, and it is unfathomable to me at this point in crypto, where shitcoins & pump & dumps and ponzi schemes and all kinds of scams persist, that anyone would take something like this on faith.

That's the problem, they make claims but fail to provide evidence. If I want to execute a currency arbitrage strategy, I want to know what is backing the currencies. In most fiat currencies, you can do this by 1) Assessing the current economic conditions & the country's history of monetary policy. 1) evaluating the currency supply against the GDP: This is really what a fiat currency is actually backed by. (Or at least one of the fundamental components) You can't do this with Tether. A country's own economic reports and extensive external analysis by others can validate the financial state of a country & its fiat currency. With Tether, you have to take their word for it. And loans? Doesn't that contradict their entire premise-- Mint 1 Tether and sell it for $1 so it's always fully backed. Loans shouldn't be necessary. Loans could be called in the second Tether shows weakness, which would further destabilize it. And lets face it: If it's not actually fully backed $1 for $USDT then there's zero guarantee that it can't start floating against other coins or currencies. It's only worth $1 if you can find someone willing to give you $1 for $1 USDT. People claim if it loses value then Tether will simply buy up enough to drive the price back to the $1 peg. Buy it with what though? Their assets, the money backing it! which means it's then backed by even less! The only way a strategy of Tether buying the price back up to the $ peg can work at all is if Tether has more assets backing it that strictly necessary. As for other assets backing it, they'll go up & down in value too. Even if it's currently fully backed, without transparency those other assets backing it can go down in value and then all of a sudden it's not fully backed. All of these concerns might be moot. Tether might be completely sound, rock solid & stable. But anyone who believes that is taking it on faith based on the word of people who are highly biased & highly interested in having $USDT owners believe it, true or not, and it is unfathomable to me at this point in crypto, where shitcoins & pump & dumps and ponzi schemes and all kinds of scams persist, that anyone would take something like this on faith.