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Actually, that got me curious. Couldn't a billionaire crush tether by shorting so much of it that it exceeded the cash reserves?
by cowvin 5y ago
Actually, that got me curious. Couldn't a billionaire crush tether by shorting so much of it that it exceeded the cash reserves?
- X6S1x6Okd1st 5y agoYou can play games to short it in DeFi which might break the peg on DeFi systems, however if anyone wants to try and arbitrage the difference (e.g. buy USDT at 0.50 USD, take it to Tether and redeem it for 1 USD) then Tether may just say "here take some of our Commerical Paper instead" or even "No you have broken our ToS".
- slaman 5y agoIn tether's terms of service they state that they have no obligation to ever give you any money for 1 tether.
- jqpabc123 5y agoCouldn't a billionaire crush tether by shorting so much of it that it exceeded the cash reserves? Short answer --- no. They can just print more tethers --- which exchanges and crypto-fools will readily accept as being worth $1 USD. You're making a common mistake --- you're assuming that the crypto market is actually a "free market" similar to the regulated stock and currency markets. You're assuming it is free of the inside manipulation that keeps the price of USDT artificially pegged at $1 USD no matter what.