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If I were tether themselves, I know I’d be personally market making every usdt trading pair on every major exchange myself. And when people bought my tethers fo

• gruez 5y ago
  That sounds like a lot of work for nothing? Suppose 1 BTC = $50k >And when people bought my tethers for crypto now you have 1 BTC, and $49,995 (assuming $10 spread and you were a maker) USDT (aka IOUs) outstanding >I’d turn around and sell the crypto for usd now you have 0 BTC, $49,995 USDT outstanding, and $50,005 (assuming $10 spread and you were a maker) From a balance sheet point of view that looks like a pretty standard market making operation. You don't need to be issuing unbacked IOUs for it to work. The only advantage that tether has is access to the initial $50k capital for market making, but you don't need to be a stablecoin issuer to pull this off. You could just as well embezzle an exchange's funds directly. Actually come to think of it, if you wanted to market make and you were ifinex/tether, the biggest advantage you can get isn't the free funds you can issue/embezzle, it's the differentiated order flow you can get as an exchange operator. You can categorize order flows as toxic/non-toxic[1] (maybe based on account trading history?), and keep them for yourself to internalize. [1] https://www.ceedtrading.com/glossary/toxic-order-flow/ https://www.ceedtrading.com/glossary/toxic-order-flow/