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Comment by X6S1x6Okd1st | Hacker News Reader

borrow APY variable for USDT on aave on Ethereum is currently 3% apy.

If you can stomach the various risks involved (e.g. smart contract risk, exposure to ethereum 51% attack or something) then acquire any asset that AAVE has (e.g. USDC, Dai, ETH, BTC), deposit it, withdrawal USDT & sell the USDT thereby naked shorting USDT for 3% APY at current rates.

Those rates are low enough that it just doesn't seem like the market is that spooked yet.

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Way too much counterparty risk in crypto markets. If there is an epic tether crash, I can't be confident that I'll get my payout. Compare this to established markets. I could log into my Charles Schwab account, make a short bet that Charles Schwab will go bankrupt overnight, and if I'm right, I know I'll get my payout.

The counter party is a smart contract AMM like curve or aave. Your only issue is liquidity and chain reliability.

Both of which are pretty big issues in the scenario we're talking about. When Tether crashes it will take down a significant chunk of the crypto world with it.

I wouldn't be surprised if congestion is extremely high on ETH if USDT collapses, but I'd be shocked if the chain started missing blocks.

Do you think that USDC would depeg as well?

If the bid and offer are like $2 - $.50, do you consider that a "depeg" or not? I think liquidity will disappear, transaction fees will go to the moon, and there won't really be a meaningful "price" because trades won't be happening.

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