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I posted this a few days ago: https://news.ycombinator.com/item?id=26106281 https://news.ycombinator.com/item?id=26106281

by EGreg 6y ago

Clewza313 6y ago
The problem with doing a DAI-USDT short is that they're correlated: if Tether implodes, it may take down DAI as well.
- betwixthewires 6y ago
  How are they correlated in such a way that this mechanism exists? The only correlation they have is that they're pegged to the same asset. Tether, if it truly has 1 to 1 backing, has no fear of losing value. DAI can lose its peg. I'd still put my money on DAI because I understand its mechanics and they're very good and I don't think for a second Tether has 1:1 USD backing. But aside from the USD hyperinflating or something, what other mechanism exists between the two?
  - Clewza313 6y ago
    Your Tether-DAI bet has to be made on an exchange, many of which are shady and unregulated; for example, we know Bitfinex is closely tied to Tether itself. When the tide goes out, we'll also find which exchanges have been putting their hands in the cookie jar, and many will implode Mt Gox style.
    - graeme 6y ago
      You’d at most lose what you staked, right? Like if the bet is truly 100:1, and you bet $100 and win but the exchange implodes, you only lose the $100 correct? Mind you not sure how it can be a risk free 100:1. I think this assumes the leverage is on the same exchange that goes bust.
- deleted 6y ago
  [deleted]
f430 6y ago
hey EGreg, When exactly is NYAG poised to make their announcement? On the 19th, over the weekend, or on next Monday?
- EGreg 6y ago
  No clue. Does anyone here know?
  - graeme 6y ago
    Iirc they set the date at roughly a month later. In other words, no set day or firm deadline, but around next week.
graeme 6y ago
So if I understand correctly: 1. You go on an exchange and bet on margin, say 100x 2. The bet is that DAI rises compared to USDt. 3. If, say, you bet $100, then you are wagering $10,000 via margin. So, if tether rises two cents, you lose $20,000 (or $200?). But if tether drops ten cents, you make $100,000. A couple questions about your bet: 1. I’m assuming people think tether is much more likely to fall than to rise. So would the odds not be asymetric and you would lose much more if something happened to DAI? Such that you might lose $50,000-$100,000 if USDT rose? 2. If tether really blows up it could take down a lot of exchanges. If the exchange failed, what’s your max loss: just the original $100? 3. Supposing you win big but crypto implodes, your winnings are priced in...DAI, ETH or something else? If they aren’t priced in usd the value may be less than 100x if the whole crypto market falls.
creepto 6y ago
I do enjoy losing money so I might give this a shot. I already have puts on RIOT and MSTR. With Elon jumping in perhaps he has some insider info that I don't, or he just enjoys manipulating markets and pump n' dumping. If Tether collapses and it dings TSLA, maybe that's just his way of telling everyone the stock price is too high.

I posted this a few days ago: https://news.ycombinator.com/item?id=26106281 https://news.ycombinator.com/item?id=26106281

by EGreg 6y ago

I posted this a few days ago: https://news.ycombinator.com/item?id=26106281 https://news.ycombinator.com/item?id=26106281

Clewza313 6y ago

The problem with doing a DAI-USDT short is that they're correlated: if Tether implodes, it may take down DAI as well.

betwixthewires 6y ago
How are they correlated in such a way that this mechanism exists? The only correlation they have is that they're pegged to the same asset. Tether, if it truly has 1 to 1 backing, has no fear of losing value. DAI can lose its peg. I'd still put my money on DAI because I understand its mechanics and they're very good and I don't think for a second Tether has 1:1 USD backing. But aside from the USD hyperinflating or something, what other mechanism exists between the two?
- Clewza313 6y ago
  Your Tether-DAI bet has to be made on an exchange, many of which are shady and unregulated; for example, we know Bitfinex is closely tied to Tether itself. When the tide goes out, we'll also find which exchanges have been putting their hands in the cookie jar, and many will implode Mt Gox style.
  - graeme 6y ago
    You’d at most lose what you staked, right? Like if the bet is truly 100:1, and you bet $100 and win but the exchange implodes, you only lose the $100 correct? Mind you not sure how it can be a risk free 100:1. I think this assumes the leverage is on the same exchange that goes bust.
deleted 6y ago
[deleted]

f430 6y ago

hey EGreg, When exactly is NYAG poised to make their announcement? On the 19th, over the weekend, or on next Monday?

EGreg 6y ago
No clue. Does anyone here know?
- graeme 6y ago
  Iirc they set the date at roughly a month later. In other words, no set day or firm deadline, but around next week.

graeme 6y ago

So if I understand correctly: 1. You go on an exchange and bet on margin, say 100x 2. The bet is that DAI rises compared to USDt. 3. If, say, you bet $100, then you are wagering $10,000 via margin. So, if tether rises two cents, you lose $20,000 (or $200?). But if tether drops ten cents, you make $100,000. A couple questions about your bet: 1. I’m assuming people think tether is much more likely to fall than to rise. So would the odds not be asymetric and you would lose much more if something happened to DAI? Such that you might lose $50,000-$100,000 if USDT rose? 2. If tether really blows up it could take down a lot of exchanges. If the exchange failed, what’s your max loss: just the original $100? 3. Supposing you win big but crypto implodes, your winnings are priced in...DAI, ETH or something else? If they aren’t priced in usd the value may be less than 100x if the whole crypto market falls.

creepto 6y ago

I do enjoy losing money so I might give this a shot. I already have puts on RIOT and MSTR. With Elon jumping in perhaps he has some insider info that I don't, or he just enjoys manipulating markets and pump n' dumping. If Tether collapses and it dings TSLA, maybe that's just his way of telling everyone the stock price is too high.