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I think a good way is to check out CoinMarketCap's Market Cap tracker. Let me elaborate. I think Market Cap = (value per asset) * (total # of assets in the mar

I think a good way is to check out CoinMarketCap's Market Cap tracker. Let me elaborate. I think Market Cap = (value per asset) * (total # of assets in the market). So the Market Cap of USDT SHOULD BE roughly equal to the number of Tethers on the market (assuming the price of a single Tether is stable, which isn't a bad assumption right now). Since "every Tether is backed 1:1 by USD" and Tether is (more-or-less) pegged 1:1 to USD, if you see the market cap drop by a significant margin, it's likely that the drop was an outflow to currency. If we check the Luna crash event (~early May - ~early June 2022), we can see that USDT lost ~18B in market cap over that period. So (I think) we can assume that there was (roughly) 18B of dollar outflow over that period. If any of my statements here are incorrect, please correct me. I'm a software engineer, not a finance artist or an MBA, and the last business class I took was summer school in High School in like 2006.

ac29 4y ago
> "every Tether is backed 1:1 by USD" Tether does not make this claim, I'm not sure why you put it in quotes
JumpCrisscross 4y ago
> we can assume that there was (roughly) 18B of dollar outflow over that period Couldn’t Tether burn tokens it holds on its own or affiliates’ books to create that impression?
- distortedsignal 4y ago
  This is a good point - the issuer of Tether (iFinex?) could burn USDT that they hold without paying out to currency. I'm not sure how holding Tether would benefit the issuer of Tether, though, since anytime anyone transferred USDT to the issuer they would expect a cash payout. So I guess my statement "USDT is backed 1:1" should actually be "circulating USDT is supposedly backed 1:1 by USD." Any "burnable Tether" should be subtracted from the Market Cap to find the actual "backed Tether." I don't know of any way to find how much USDT is held by the issuer of Tether (or their coparties) and how much is held by other wallets at any given time. I suspect that calculation would require a significantly greater knowledge of the blockchains that USDT is on than what I have.
  - wmf 4y ago
    You can see the "Authorized but not issued" numbers at https://tether.to/en/transparency/ https://tether.to/en/transparency/ and a detailed outside analysis of redemptions http://jpkoning.blogspot.com/2022/06/watching-tether.html http://jpkoning.blogspot.com/2022/06/watching-tether.html

ac29 4y ago

> "every Tether is backed 1:1 by USD" Tether does not make this claim, I'm not sure why you put it in quotes

JumpCrisscross 4y ago

> we can assume that there was (roughly) 18B of dollar outflow over that period Couldn’t Tether burn tokens it holds on its own or affiliates’ books to create that impression?

distortedsignal 4y ago
This is a good point - the issuer of Tether (iFinex?) could burn USDT that they hold without paying out to currency. I'm not sure how holding Tether would benefit the issuer of Tether, though, since anytime anyone transferred USDT to the issuer they would expect a cash payout. So I guess my statement "USDT is backed 1:1" should actually be "circulating USDT is supposedly backed 1:1 by USD." Any "burnable Tether" should be subtracted from the Market Cap to find the actual "backed Tether." I don't know of any way to find how much USDT is held by the issuer of Tether (or their coparties) and how much is held by other wallets at any given time. I suspect that calculation would require a significantly greater knowledge of the blockchains that USDT is on than what I have.
- wmf 4y ago
  You can see the "Authorized but not issued" numbers at https://tether.to/en/transparency/ https://tether.to/en/transparency/ and a detailed outside analysis of redemptions http://jpkoning.blogspot.com/2022/06/watching-tether.html http://jpkoning.blogspot.com/2022/06/watching-tether.html