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Not sure how exactly this digital asset is financially intertwined with other assets, but at the very least I'd expect this to cause some significant negative s
by uejfiweun 4y ago
Not sure how exactly this digital asset is financially intertwined with other assets, but at the very least I'd expect this to cause some significant negative sentiment within the markets. Anyone who's invested in a digital asset right now is watching this situation and thinking, could this happen to my money too? I'd guess that a sizeable portion of these people are going to end up selling.
Also, anyone find it sus that these massive selloffs are happening exactly in the middle of the night for the US east coast?
- qayxc 4y ago> Also, anyone find it sus that these massive selloffs are happening exactly in the middle of the night for the US east coast? Not in the slightest. Time zones exist and it only goes to show that maybe a lot of tokens have been held oversea. The (crypto-) world doesn't just consist of the US, let alone the US east coast. If some (institutional) investors in Europe or Asia decided to liquidate their assets, that's exactly what you'd expect.
- JumpCrisscross 4y ago> sus that these massive selloffs are happening exactly in the middle of the night for the US east coast? Not totally. Algorithmic stablecoins have two equilibria: 0 and 1. Zero is presumably permanent. Small dislocations from 1 are fixable, but require arbitrage bandwidth. That bandwidth has a limit that varies based on participation. Considering this, it’s almost expected that the peg would break more violently when most arbitrageurs are asleep. And given a single unfixed deviation from 1 pushes the system to 0, and given zero is a permanent outcome, one would expect the long-run value of the system to be zero while governed by these rules. (Hence the push to accumulate unconnected reserves.)