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I don't think anyone knows for sure. There is a decent chance that Tether is (or was before the crash) decently backed by "stuff" - just not with what it claims
by mywaifuismeta 4y ago
I don't think anyone knows for sure. There is a decent chance that Tether is (or was before the crash) decently backed by "stuff" - just not with what it claims to be backed by. I'd imagine other crypto holdings were a significant part of it. In other words, it's not really a stablecoin, but some other complex derivative instrument. So it depends on how you define scam. It's certainly false advertising and has always been.
- nly 4y agoMy money is on it being "backed" by Bitcoin
- CaptainZapp 4y agoIt could as well be backed by nothing, but hot air. Since the company is so evasive and has been for years nobody outside really knows.
- compsciphd 4y agoits fundamentally not then not different than any other DeFi algorithmic stable coin.
- aaaaaaaaata 4y agoDollar equivalent corporate paper, was the jargon I heard — which sounds like fancy-talk for "Evergrande bonds".
- gregable 4y agoI suspect it's backed by loans to bitfinex. Basically tether mints a bunch of USDT, 'loans' it to bitfinex which then creates an asset on tether's balance sheet of the loan. Bitfinex then goes and buys BTC with the USDT raising the price of BTC. The problem here is that there is no actual USD anywhere in this system. Net, the system is just one where tether is getting minted out of thin air and then sold to the public for BTC or whatever coins.