3 ms·

In the short term, they have the reserves for sure. In the short term, this is more of a classic bank-run. The Terra-coin + Luna scared a lot of cryptocoin hol

In the short term, they have the reserves for sure. In the short term, this is more of a classic bank-run. The Terra-coin + Luna scared a lot of cryptocoin holders, and now they're running away from another stablecoin. Even if Bitfinex had the money, the amount of traders leaving USDT has to be a colossal amount. The amount of money Bitfinex can transfer at any given time is limited, so the peg will bend and buckle. ------- The big question is: does Bitfinex have enough reserves to weather the storm? Not just this short-term storm, but the whole shebang that's about to happen? We will find out... eventually. UST / Luna had substantial reserves. But it clearly wasn't enough. Probably because Anchor promised 20% gains and there was simply more UST in existence than the amount of USD put into that system.

chinathrow 5y ago
> and now they're running away from another stablecoin. From another not so stable coin. Fixed that for you.
CaptainZapp 5y ago
> In the short term, they have the reserves for sure. Why for sure? Their "audits" and other information provided that they have the reserves were rather unsubstantial, if not outright dodgy.
- dragontamer 5y ago
  Short term, USDT kept enough reserves to hold the peg steady for years. I'm not saying USDT was 100% backed. They probably could have accomplished all of this with just 20% backing, maybe even less. But in the short term, only 20% of people would ever "test" the reserves so to speak. Now I don't know how much USDT was fraudulent... I do believe a lot of it was fraud. But there's clearly a nugget of truth, a nugget of backing that kept the price steady last year and the year before. Once that "nugget" of stability runs out, its all over.
adhesive_wombat 5y ago
> UST / Luna had substantial reserves. Did they, or did they just claim to while minting stablecoin in order to pump the price of Bitcoin? Which these guys (Tether) would want to do because the owners of Tether are a massive exchange, and they depend on Bitcoin being high to attract customers to the market, and the first thing news customers so is bring the real objective with them: actual cash.
- dragontamer 5y ago
  UST is Terra-coin, which collapsed 3 days ago. USDT, Tether, is a completely different coin. the one we're discussing today. --------- UST + Luna had substantial reserves. They proved it with their actions this past week. They weren't *enough* reserves mind you, but they were posting their BTC-wallets on Twitter and showing the movements.
  - adhesive_wombat 5y ago
    Yes, sorry that wasn't clear, and I said Tether when I meant stablecoin in general. I meant that they didn't have the reserves they needed ("substantial" isn't good enough) and now Tether has an even bigger incentive to run uncollateralized because of who they are.
    - eudoxus 5y ago
      "stablecoins in general" doesn't really apply here since the two in question work radically different. Collateralized vs Algorithmic. Theoretically the Terra UST stable coin didn't need reserves to keep the peg at $1, unlike Tether USDT, which does.
      - hnaccount_rng 5y ago
        how do algorithmic stable coins work?
        riwsky 5y ago
meltedcapacitor 5y ago
UST had like 10 cents of reserves in other cryptos for every UST. Is that substantial?
- FabHK 5y ago
  No. It means that they could fix things if the price dropped to 0.90, but not if the price dropped to 0.80.
NicoJuicy 5y ago
> In the short term, they have the reserves for sure. They aren't even audited by a credible firm.
whimsicalism 5y ago
> UST / Luna had substantial reserves. This alone suggests you don't know what you are talking about. Compare to reserves backing Dai, or the reserves USDC claims to have. UST/Luna had nothing and they were also highly correlated. It was a stupid stablecoin to hold in, which is why I never did - despite having holdings in Dai & USDC.
- dragontamer 5y ago
  "Substantial reserves" meaning that UST / Luna was able to keep the peg for 1.5 years. That's a reserve for sure. Is it enough for this current storm that the cryptocoin community is having? Obviously not, it all collapsed. But it was substantial enough to perpetuate its own myth for over a year. That's the thing. You have to admit that these things can last months, or years even if you want to be honest about discussing the nature of these cryptocoins.
  - whimsicalism 5y ago
    You can't just string along two unrelated concepts with the phrase "meaning that." Not going to keep replying.

chinathrow 5y ago

> and now they're running away from another stablecoin. From another not so stable coin. Fixed that for you.

CaptainZapp 5y ago

> In the short term, they have the reserves for sure. Why for sure? Their "audits" and other information provided that they have the reserves were rather unsubstantial, if not outright dodgy.

dragontamer 5y ago
Short term, USDT kept enough reserves to hold the peg steady for years. I'm not saying USDT was 100% backed. They probably could have accomplished all of this with just 20% backing, maybe even less. But in the short term, only 20% of people would ever "test" the reserves so to speak. Now I don't know how much USDT was fraudulent... I do believe a lot of it was fraud. But there's clearly a nugget of truth, a nugget of backing that kept the price steady last year and the year before. Once that "nugget" of stability runs out, its all over.

adhesive_wombat 5y ago

> UST / Luna had substantial reserves. Did they, or did they just claim to while minting stablecoin in order to pump the price of Bitcoin? Which these guys (Tether) would want to do because the owners of Tether are a massive exchange, and they depend on Bitcoin being high to attract customers to the market, and the first thing news customers so is bring the real objective with them: actual cash.

dragontamer 5y ago
UST is Terra-coin, which collapsed 3 days ago. USDT, Tether, is a completely different coin. the one we're discussing today. --------- UST + Luna had substantial reserves. They proved it with their actions this past week. They weren't *enough* reserves mind you, but they were posting their BTC-wallets on Twitter and showing the movements.
- adhesive_wombat 5y ago
  Yes, sorry that wasn't clear, and I said Tether when I meant stablecoin in general. I meant that they didn't have the reserves they needed ("substantial" isn't good enough) and now Tether has an even bigger incentive to run uncollateralized because of who they are.
  - eudoxus 5y ago
    "stablecoins in general" doesn't really apply here since the two in question work radically different. Collateralized vs Algorithmic. Theoretically the Terra UST stable coin didn't need reserves to keep the peg at $1, unlike Tether USDT, which does.
    - hnaccount_rng 5y ago
      how do algorithmic stable coins work?
      - riwsky 5y ago

meltedcapacitor 5y ago

UST had like 10 cents of reserves in other cryptos for every UST. Is that substantial?

FabHK 5y ago
No. It means that they could fix things if the price dropped to 0.90, but not if the price dropped to 0.80.

NicoJuicy 5y ago

> In the short term, they have the reserves for sure. They aren't even audited by a credible firm.

whimsicalism 5y ago

> UST / Luna had substantial reserves. This alone suggests you don't know what you are talking about. Compare to reserves backing Dai, or the reserves USDC claims to have. UST/Luna had nothing and they were also highly correlated. It was a stupid stablecoin to hold in, which is why I never did - despite having holdings in Dai & USDC.

dragontamer 5y ago
"Substantial reserves" meaning that UST / Luna was able to keep the peg for 1.5 years. That's a reserve for sure. Is it enough for this current storm that the cryptocoin community is having? Obviously not, it all collapsed. But it was substantial enough to perpetuate its own myth for over a year. That's the thing. You have to admit that these things can last months, or years even if you want to be honest about discussing the nature of these cryptocoins.
- whimsicalism 5y ago
  You can't just string along two unrelated concepts with the phrase "meaning that." Not going to keep replying.