Like if you short it and the price doesn't move (by design) are you out any money?
The price won't go up (by design) because nobody's going to spend too much money from their reserves to support a price over US$1.
But it's possible for the reserves to run dry in which case the price goes down and you win.
So if you wanted to redeem your assets from a private chain, wouldn't those trades need to interact with the company's holdings, rather than the wider marketplace?
I do it; on Aave you can deposit USDC and borrow USDT against it, earning an interest on USDC and paying interest on the USDT. It currently costs me about 3 APR to short Tether. What's nice is that you can iterate the strategy, e.g. deposit 1000 USDC, borrow 950 USDT, swap this USDT for USDC, deposit the USDC, borrow more USDT...
https://app.aave.com/ offers "E-mode", which lets you borrow stablecoins worth up to 99 % of the stablecoins you deposited.
the fact that defi shorting is available is a great improvement. now there's only smart contract risk, which for aave is negligible compared to exchange risk.
if i had gone through with it, i would have paid 5 years of interest for close to no return, including in 2018 when crypto fell 90%.
also, if enough people are levered short, crypto traders could short squeeze you. the price just needs to go up temporarily.
also, there's counterparty risk. is the exchange you're trading on going to stay up if tether goes to 0? depends on which one.
My guess is you would want to short it without exposure to eth and then idk.. You could do the same with USDC.