Hacker News Reader

Comment by incrudible | Hacker News Reader

Terra was collateralized by crypto. USDT is collateralized by… something, maybe. Given that USDT always regained its peg regardless, the depeg of USDC seems like an overreaction.

View on HN

USDT always regained its peg until one day it doesn't

Terra regained it's peg until it didn't.

Terra is not even in theory backed by real dollars, it had a known failure case, which did in fact occur. Again, the market priced that risk at virtually zero until the failure case was tangible.

That day will be when they finally release an audit

This will never happen, it’ll have to be when redemptions stop working.

Is there any proof that anyone has ever successfully redeemed USDT from Tether?

Yes, there are even people on HN that have reported successful redemption of tether for USD. You can ask people directly. It's not like this is a rare thing that never happens. If people weren't able to do so you would expect people to actually make claims aginst it.

I have not seen anyone on HN ever claim to have exchanged the necessary 100K USDT for $99k or 1M+ USDT for $1M+ with Tether's parent company.

Look back to one of the Tether submissions and you will find someone who says that their company was able to do it.

They may well be 100% collateralized in bad collateral. Same for USDC really, except the collateral is not as bad.

100% of $0. Tether is entirely a scam by intentional criminals and not a single dollar is in a vault.

They say they're 1:1 backed but have committed obvious financial fraud around this. There's no benefit to them to be even 95% backed, it's 100% or jail, so why would they bother?

This is how they maintain the peg perfectly - it's all fake. They "redeem" their friend's Tether with their personal funds but they won't even try if there's a run.

> it's 100% or jail

Says who?

That is not the point. USDT repegged from far worse news. It is a hot potato, but the market used to price that risk at almost zero for 99.9% of the time.

Reply on news.ycombinator.com