Re:Tether starting to lose its peg too, after Terra did
by fastball on Thursday May 12, 2022 @03:23AM
(#31350341)
Well the whole point of a "backed" stablecoin is that you can do this, and arbitrage should never be an issue because the currency is supposed to be pegged to the dollar. And if the mechanism for this peg is 1-to-1 backing then it's a non-issue.
Contrast this with UST which was an "algorithmic" stablecoin, where the peg is maintained by much more complex mechanisms.
The issue in this case is (of course) that USDT are not actually backed 1-to-1 with actual dollars in actual reserves but rather backed mostly by hopes and dreams.
Contrast this with UST which was an "algorithmic" stablecoin, where the peg is maintained by much more complex mechanisms.
The issue in this case is (of course) that USDT are not actually backed 1-to-1 with actual dollars in actual reserves but rather backed mostly by hopes and dreams.