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De-pegged (I means really de-pegged, not a transient .97c a dollar on exchanges like it happened) means it's not fulfilling its promise, hence the trust is lost
by littlestymaar 3y ago
De-pegged (I means really de-pegged, not a transient .97c a dollar on exchanges like it happened) means it's not fulfilling its promise, hence the trust is lost.
Also, Tether would try to save face, by honoring USDT redemption at 1$ as long as they can, which drains their reserves. So if they aren't able to do it anymore, it means that they don't have anything left, and USDT is now worthless.
These things are highly non-linear and bank runs can kill a bank in no time (and tether is functionally a bank).
- loeg 3y agoSure. People disinclined to trust Tether's word are already out of USDT. Clearly, a lot remain. Some of those people might attempt to profit from arbitraging a de-pegged Tether (maybe at $0.97 rather than $0.50 but it's the same principle).