It's there. It continues to happen almost hourly. https://twitter.com/whale_alert
https://twitter.com/usdcoinprinter
Two hours ago $100m USDC went into circulation. Almost another $100m two hours before that.
Two hours ago $100m USDC went into circulation. Almost another $100m two hours before that.
What does "Just printed $100,494,053 USDC!" mean?
I think this means that someone minted $100M of USDC by depositing USD.
The way this normally happens, USD deposits are made to an exchange that has a relationship with Circle, and 1 USDC is minted for each 1 USD on deposit at Circle.
Circle then invests those funds in things that are considered financially prudent, making some amount of money, but preserving the full amount of USD required to back the issued USDC. What they really do with the money has historically been the concern by people who don't trust corporate transparency, maybe rightfully so.
These "usdcoinprinter" tweets seem to imply that Circle is just making up fictional USDC not backed by anything to prop up the failing crypto market. As in, "we just minted $100M USDC which we'll now use to buy bitcoin, to keep the price of bitcoin high"? I'm not sure I see how that could work without Circle risking their entire business and probably committing some type of fraud.
On the other hand, the most popular (?) stablecoin, Tether (USDT) doesn’t have a one-to-one relationship with USD deposits, and the amount it really has in USD is believed to be very low (I don’t know the numbers, but have read that there haven’t been any audits or published audits).
But I find it generally a bit suspicious that people would choose to buy a stablecoin in order to buy bitcoin instead of buying the bitcoin directly (the explanation given is usually something about evading currency controls/KYC). In a bear market, I find it even more suspicious that there would still be more buyers than sellers of these stablecoins necessitating further creation.
Just to be clear, you're alleging a massive fraud by these people: https://www.crunchbase.com/organization/circle-2
> But I find it generally a bit suspicious that people would choose to buy a stablecoin in order to buy bitcoin instead of buying the bitcoin directly (the explanation given is usually something about evading currency controls/KYC).
I think it has more to do with how DeFi works. You can get huge yields on stablecoins right now (like 40%+), so a lot of people are taking money they would normally put in the stock market and are farming yields with stablecoins instead. I'm sure you'll identify this as a big red flag for scam, but it's actually not. It's the modern equivalent of saying "open a bank account with $100 and get a free toaster", except the numbers are much larger, and they're tokens instead of toasters.
> In a bear market, I find it even more suspicious that there would still be more buyers than sellers of these stablecoins necessitating further creation.
In a bull market, people sell their stablecoins to buy bitcoin. In a bear market, people sell their bitcoin to buy stablecoins.
And that's only what rose to the surface.
I'm more familiar with the people behind Tether, where I'm fairly confident they are crooks. I know nothing specifically about USDC except that the issuance patterns look similar.
> You can get huge yields on stablecoins right now (like 40%+), so a lot of people are taking money they would normally put in the stock market and are farming yields with stablecoins instead. I'm sure you'll identify this as a big red flag for scam, but it's actually not.
If there is an investment sector that promises such a massively higher yield than the rest of the economy, there are really only two possible explanations: (1) a massively higher risk of loss or (2) a scam. I've yet to see an explanation for why there is an enterprise that (a) can generate a 40% return and (b) would take crypto loans at 40% instead of taking fiat loans at much lower rates and buying their own crypto.
I've also yet to see an explanation for where those massive DeFi returns are supposed to come from. There doesn't seem to be any underlying economic activity, just finance all the way down. That would make the only revenue source the influx of new investment money, which has not, historically, proven to be a sound business to be in.
> I'm more familiar with the people behind Tether, where I'm fairly confident they are crooks. I know nothing specifically about USDC except that the issuance patterns look similar.
I think Tether are probably crooks that won't ever get caught, because I don't think their scheme will collapse, but I agree.
The main difference in issuance between USDC (Circle, New York) and GUSD (Gemini, Boston) vs USDT (Tether, US Virgin Islands) is that these are US companies playing by US laws to do business with US exchanges. They exist primarily because everyone is skeptical of Tether.
To be clear, neither USDC nor GUSD have full audits (they provide attestations like Tether), so some skepticism is definitely warranted. But know that these are US companies backed by US investors, selling products to other US companies.
For example, we know Gemini was founded by the Winklevoss's because they're very public about it. We know Tether was founded by Bitfinex because of the Paradise Papers.
While they could all technically be insolvent and none of us would know until it's too late, I trust the US stablecoins backed by prominent investors a lot more than I trust USDT.
> If there is an investment sector that promises such a massively higher yield than the rest of the economy, there are really only two possible explanations: (1) a massively higher risk of loss or (2) a scam.
I appreciate your skepticism, but you're missing another explanation: (3) innovation.
> I've yet to see an explanation for why there is an enterprise that (a) can generate a 40% return
Let me show you a live example for a hot project in DeFi right now. This launched 4 days ago: https://www.oxdao.fi/
See their medium post if you want to know why the DAO exists, but "farming" is a common thing in DeFi and you don't really have to know what the project does to do it: https://medium.com/@0xdao?p=86a8d6026191
If you stake your USDC there, you would currently be earning 37% APR on your USDC, paid to you in OXD. This rate of earning is highly volatile as it's based on the price of OXD, which is a brand new cryptocurrency that's still in price discovery. If you were to claim and sell your OXD as you earn it from staking USDC, the rate would be real.
If OXD is a very successful project, it could be worth a lot more. If it's a total failure, it could be worth noting. You get to decide when to enter and exit.
Assuming there's not a contract bug, the USDC will be returned to you in full when you decide to exit. If there is a contract bug, you lose your USDC and you get to read about what happened here: https://rekt.news/
This isn't a scam and the 40% return is real, but it's transitory. You're essentially temporarily pledging an asset to show support for the project, and you're receiving a share of the project in return.
When you decide to exit, you get the full amount of USDC returned to you, plus the OXD you earned, so your USDC is only at "contract risk" (vulnerable to a programming bug) and "opportunity risk" (maybe it could have made more elsewhere), but not "price risk" (vulnerable to a market crash).
> and (b) would take crypto loans at 40% instead of taking fiat loans at much lower rates and buying their own crypto.
The 40% isn't because someone is paying you to borrow that, it's because they're paying you in shares of their own (currently worthless?) project, and you're betting it'll perform better than USD parked in a money market account or treasury or wherever you keep USD.
This is an extremely common way of generating yield. Here's a dashboard you can use to learn more: https://defillama.com/protocols/yield
What does the project get out of this? Marketing, branding, confidence.
It's a huge vote of confidence that this project was able to lock over $4B in 4 days. The project is now has a market cap of over $30M on the tokens they've already handed out.
> I've also yet to see an explanation for where those massive DeFi returns are supposed to come from.
This particular example is a wonky one about DAO voting itself, so it's a bit meta, but the short answer really is "innovation".
If you don't find this explanation sufficient, let me know what's confusing and I'll try to help you understand it.
AFAIK noone borrows at 40%, as the parent said, at least with common tokens. There might be exceptions for borrowing niche tokens with massive issuance or what not.
People do borrow things like USDC at ~5%, sometimes higher. It varies a lot; see Compound or Aave for current market rates. These are basically margin loans, collateralized by tokens.
As for why users take these DeFi loans, sometimes it's just to access leverage, but I think it's mostly to chase those (say) 40% APRs. In theory they can make much more than the loan rate, though this assumes that the token they're farming retains its value, doesn't get hacked, the pool's rewards don't stop or get diluted too much, etc.
Why wouldn't those users instead take "TradFi" loans, which can be as low as ~1%? To access those low rates, I would need substantial collateral in stocks, real estate, etc. I might not have those assets (or I'm already borrowing what I can against them), whereas I might have e.g. BTC sitting around. I could sell the BTC, but that would be a taxable event, plus I might want to remain long BTC.
Is it a "fraud" is an open question because all that crap is unregulated wild west. They be doing it legally.
Probably some institutional investor drove a garbage truck full of unmarked dollars in small denominations to some back alley near Circle headquarters.
You can look at the market cap here: https://coinmarketcap.com/currencies/tether/
IF the type of "printing" you were talking about were happening, you would see the market cap increasing with every print.
$47B in “revenue”, with probably a 99.99% margin.
Deal sized like this take a very long time, tons of legal work, audits, background checks, etc. To have multiple every day is nonsensical.
Tether - we’ll tether is not