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If you have a backed stablecoin (as opposed to algorithmic stablecoin) that is pegged to the USD without any funny business, then the price of that coin can alw
by baobabKoodaa 4y ago
If you have a backed stablecoin (as opposed to algorithmic stablecoin) that is pegged to the USD without any funny business, then the price of that coin can always be restored to $1. No matter how badly people "lose faith" in the coin.
- vincnetas 4y ago"... without continuous funding "
- BbzzbB 4y agoGP's last paragraph seems to imply to me too that trust is all that keeps the pegs. I think the billions of dollars in arbitrage opportunity is a bit more powerful than trust as we've seen a few days ago when USDT lost its peg, but what do I know Trust keeps bank runs away, arbitrage keeps the peg tight (feeding into said trust).
- baobabKoodaa 4y agoSounds like you are confusing an algorithmic stablecoin with a fully backed stablecoin. If I am mistaken and you have an actual argument behind that smirk, then please go ahead and present your argument.
- TomSwirly 4y agoAs long as you're willing to expend unlimited amounts of money doing so. But no one is.
- baobabKoodaa 4y agoFalse. What you're describing applies to algorithmic stablecoin, but it doesn't apply to a backed stablecoin. If I sell 1000 units of BAOBABUSD to people for $1 each, and then they all panic and sell, I can buy all 1000 units of the stablecoin by using the $1000 I already have in the bank. Please explain why you feel that this maneuver requires unlimited amounts of money?