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> As a result, BUSD market cap will only decrease over time Am I correct that this matches what you would expect them to say if they didn't have enough to cove
by sam_goody 4y ago
> As a result, BUSD market cap will only decrease over time
Am I correct that this matches what you would expect them to say if they didn't have enough to cover the money going out?
Similar to the when Mr. Ponzi (the original) first announced that his investments were doing poorly; that he would only be returning 90 cents on the dollar, before he saw a run on the cash and decided to split town?
- Veen 4y agoMaybe, but, as it stands, BUSD's market cap can't grow, because no more coins can be minted. Therefore, the market cap either stays the same (unlikely) or shrinks as people redeem their coins for dollars (and then, and this is speculation, crashes when people realize they can't even do that because the reserves are insufficient).
- im3w1l 4y agoNo. Not having any money, you want to prevent redemptions and get people to increase deposits. Like imagine you are doing a ponzi right, you have 1b of assets and owe your customers 2b. Then with outflows this could turn into say 0.1b of assets and owing 1.1b - game over. But with inflows it could turn into 9b of assets and owing 10b. Now you just have to do a tiny bit of gambling on stocks or bonds to be solvent. Burn the books and it's like it never happened.
- LatteLazy 4y agoNo, the market cap will decrease because the price will remain fixed (Paxos will still only pay 1USD per BUSD). But no new coins will be created. So as old ones are traded in, over time the cap will fall...