4 ms·

What if they choose two different chains?

by koolba 5y ago

wmf 5y ago
That would explicitly break the one promise they made, which is that their coins are backed 1:1.
- koolba 5y ago
  I meant what if USDC and USDT pick two different chains to bless as their “official” chain? Is that not possible? EDIT: I just realized the last letter in your examples are “A” and “B” to signify two versions of the same thing. My eyes aren’t what they used to be!
  - cinquemb 5y ago
    It is possible.
  - user-the-name 5y ago
    USDT is already running on multiple chains. That is trivially possible. The question is what happens if one of those chains were to split.
    - imtringued 5y ago
      Because anyone can create a fork of a chain the forks have to be authorized. The easiest way to authorize a chain would be to let the custodian (is that the right word?) of USDT decide which chains are authorized for USDT. If the custodian authorizes overlapping USDT then it is equivalent to creating an empty chain and creating USDT out of nothing to fill the newly created chain. In other words it would dilute the value of USDT. This is an interesting problem because it shows a fundamental flaw in blockchains. They only have authority over themselves. No wonder cryptocurrencies and their advocates are so self centered. Because nothing that exists outside their chain (even other cryptocurrencies) is graspable! It's not trustless because the trust (in the algorithm) is still there, the difference is that they minimized the need for trust to the absolute minimum. It's no longer about how much you trust but about what you trust.
- cinquemb 5y ago
  Frax, USDT, and TrueUSD allow people to deposit into bank accounts and mint on eth mainnet or avalanche c-chain now (note: not mint on both places at the same time), neither make the claim that they are 1:1 backed (except for TrueUSD), but they make the claim that if you wanted to at any time (if you meet the criteria) you can withdraw from eth mainnet or avalanche c-chain to your bank account.
  - lupire 5y ago
    When did Tether USDT stop (fraudulently) claiming to have backing assets?
    - cinquemb 5y ago
      None of this is related to the minting/burning across multiple chains or their cross chain redeemability (or lack thereof) but here are their respective claims: USDT claim (“Every Tether token is always 100% backed by our reserves, which include traditional currency and cash equivalents and, from time to time, may include other assets and receivables from loans made by Tether to third parties, which may include affiliated entities (collectively, “reserves”).”) [1] TrueUSD claim ("We work with independent third-party financial institutions to provide cash management for the underlying reserves backing TUSD tokens so that each TUSD token is backed by an equivalent amount of dollar deposits, cash equivalents, short-term government treasuries, or liquid investments. To achieve this, a portion of the dollar deposits backing TUSD are held in one or more depository accounts at our Banking Partners whose deposits may not be insured by the Federal Deposit Insurance Corporation (“FDIC”). [2] Frax claim ("FRAX stablecoins can be minted by placing the appropriate amount of its constituent parts into the system. At genesis, FRAX is 100% collateralized, meaning that minting FRAX only requires placing collateral into the minting contract. During the fractional phase, minting FRAX requires placing the appropriate ratio of collateral and burning the ratio of Frax Shares (FXS). While the protocol is designed to accept any type of cryptocurrency as collateral, this implementation of the Frax Protocol will mainly accept on-chain stablecoins as collateral to smoothen out volatility in the collateral so that FRAX can transition to more algorithmic ratios smoothly. As the velocity of the system increases, it becomes easier and safer to include volatile cryptocurrency such as ETH and wrapped BTC into future pools with governance. ")[3] [1] https://tether.to https://tether.to [2] https://trueusd.com/terms-of-service/ https://trueusd.com/terms-of-service/ [3] https://docs.frax.finance/overview https://docs.frax.finance/overview

What if they choose two different chains?

by koolba 5y ago

What if they choose two different chains?

wmf 5y ago

That would explicitly break the one promise they made, which is that their coins are backed 1:1.

koolba 5y ago
I meant what if USDC and USDT pick two different chains to bless as their “official” chain? Is that not possible? EDIT: I just realized the last letter in your examples are “A” and “B” to signify two versions of the same thing. My eyes aren’t what they used to be!
- cinquemb 5y ago
  It is possible.
- user-the-name 5y ago
  USDT is already running on multiple chains. That is trivially possible. The question is what happens if one of those chains were to split.
  - imtringued 5y ago
    Because anyone can create a fork of a chain the forks have to be authorized. The easiest way to authorize a chain would be to let the custodian (is that the right word?) of USDT decide which chains are authorized for USDT. If the custodian authorizes overlapping USDT then it is equivalent to creating an empty chain and creating USDT out of nothing to fill the newly created chain. In other words it would dilute the value of USDT. This is an interesting problem because it shows a fundamental flaw in blockchains. They only have authority over themselves. No wonder cryptocurrencies and their advocates are so self centered. Because nothing that exists outside their chain (even other cryptocurrencies) is graspable! It's not trustless because the trust (in the algorithm) is still there, the difference is that they minimized the need for trust to the absolute minimum. It's no longer about how much you trust but about what you trust.
cinquemb 5y ago
Frax, USDT, and TrueUSD allow people to deposit into bank accounts and mint on eth mainnet or avalanche c-chain now (note: not mint on both places at the same time), neither make the claim that they are 1:1 backed (except for TrueUSD), but they make the claim that if you wanted to at any time (if you meet the criteria) you can withdraw from eth mainnet or avalanche c-chain to your bank account.
- lupire 5y ago
  When did Tether USDT stop (fraudulently) claiming to have backing assets?
  - cinquemb 5y ago
    None of this is related to the minting/burning across multiple chains or their cross chain redeemability (or lack thereof) but here are their respective claims: USDT claim (“Every Tether token is always 100% backed by our reserves, which include traditional currency and cash equivalents and, from time to time, may include other assets and receivables from loans made by Tether to third parties, which may include affiliated entities (collectively, “reserves”).”) [1] TrueUSD claim ("We work with independent third-party financial institutions to provide cash management for the underlying reserves backing TUSD tokens so that each TUSD token is backed by an equivalent amount of dollar deposits, cash equivalents, short-term government treasuries, or liquid investments. To achieve this, a portion of the dollar deposits backing TUSD are held in one or more depository accounts at our Banking Partners whose deposits may not be insured by the Federal Deposit Insurance Corporation (“FDIC”). [2] Frax claim ("FRAX stablecoins can be minted by placing the appropriate amount of its constituent parts into the system. At genesis, FRAX is 100% collateralized, meaning that minting FRAX only requires placing collateral into the minting contract. During the fractional phase, minting FRAX requires placing the appropriate ratio of collateral and burning the ratio of Frax Shares (FXS). While the protocol is designed to accept any type of cryptocurrency as collateral, this implementation of the Frax Protocol will mainly accept on-chain stablecoins as collateral to smoothen out volatility in the collateral so that FRAX can transition to more algorithmic ratios smoothly. As the velocity of the system increases, it becomes easier and safer to include volatile cryptocurrency such as ETH and wrapped BTC into future pools with governance. ")[3] [1] https://tether.to https://tether.to [2] https://trueusd.com/terms-of-service/ https://trueusd.com/terms-of-service/ [3] https://docs.frax.finance/overview https://docs.frax.finance/overview