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The issue is the promise Tether is making. It is “backed” by debt which potentially can never be payed back. How does Tether prop up the value of USDT if there

• cinquemb 5y ago
  > The issue is the promise Tether is making. It is “backed” by debt which potentially can never be payed back. SSDD with pretty much every bank/branch not domiciled in the US that has accounts denominated in USD… they make the same promises > How does Tether prop up the value of USDT if there is a mass sell off into fiat? Is this the duty of the exchanges? Does Tether buy USDT off exchanges in order to push up price when there is a sell off? How big a sell off can they contain? As long as Tether continues to have higher cash flows than many tradfi banks operating in eurodollar markets now (esp in smaller countries), you'd be better off asking these questions about those other banks now… > How would a DAO offer the same promises of “backing” that made USDT possible without government issued stable-coins? On chain liabilities between DAOs and centralized orgs on chain denominated in decentralized uncollateralized stablecoins, and the desire for people to purchase such liabilities at discounts with fluctuation price of the stablecoins that freely float against things like USDT/USDC/DAI/TUSD/etc (not too different from the incentives involved in eurodollar futures markets).