Re:Tether starting to lose its peg too, after Terra did
by dragontamer on Thursday May 12, 2022 @03:15AM
(#31350273)
Short term, USDT kept enough reserves to hold the peg steady for years.
I'm not saying USDT was 100% backed. They probably could have accomplished all of this with just 20% backing, maybe even less. But in the short term, only 20% of people would ever "test" the reserves so to speak.
Now I don't know how much USDT was fraudulent... I do believe a lot of it was fraud. But there's clearly a nugget of truth, a nugget of backing that kept the price steady last year and the year before.
Once that "nugget" of stability runs out, its all over.
I'm not saying USDT was 100% backed. They probably could have accomplished all of this with just 20% backing, maybe even less. But in the short term, only 20% of people would ever "test" the reserves so to speak.
Now I don't know how much USDT was fraudulent... I do believe a lot of it was fraud. But there's clearly a nugget of truth, a nugget of backing that kept the price steady last year and the year before.
Once that "nugget" of stability runs out, its all over.