I had also held a small amount for online purchases.
More generally, the reason to hold a stablecoin rather than a "real" dollar is because you need the former in order to interface with smartcontracts on blockchains. Also, to buy from merchants who sell goods for stablecoins because they're in a grey market that banks don't want to touch.
Side note: I don't know why people keep asking that question -- it gets asked and answered each time this topic comes up e.g.
There is Gemini USD - similar story.
There is DAI if you are long on ETH/BTC and still want/need liquidity.
Curve has a pool without USDT (cDAI/cUSDC).
Uniswap lets you make any type of pair. On its heyday (before v3), I was providing to DAI/USDC and I was getting 2% returns per month.
So my question is: why USDT, when there is a handful of better stabletokens that can be used for the exact same purpose? If it is common knowledge that Tether is not to be trusted, why would any honest person still use it?
https://news.ycombinator.com/item?id=31422545
https://news.ycombinator.com/item?id=31417134
https://news.ycombinator.com/item?id=31412835
My comment was answering a question about “why stablecoins at all”.
To answer your question, because some uniswap v3 pools with USDT offered competitive returns, like the 0.05% WETH/USDT one. That was one of many I used, which included those that paired DAI or USDC with ETH.
I considered the concerns overblown at the time and so was okay with making some the USDT pools a part of my LP portfolio.
I’m honest.
Honesty is not just about "I wasn't the one profiting from the bad thing". It's also "I'm willing to call evil/immoral for what it is".
And I wasn't comparing in terms of returns. I just pointed out that there is no real use-case for USDT that can't be served by the other tokens, including yield-farming in liquidity pools.
Sidestepping the definitional issue, I certainly worry when a pegged asset trades at a persistent discount, even a small one, when it didn't before. A stablecoin should generally trade at a premium just as often as it trades at a discount. When one goes long periods without ever being above, that is a strong signal. And when everyone panics, that's exactly when it's too late to get out. You have to beat the rush.
Remember, even up until the morning of May 9th, the day of the real TerraUSD depeg, people made that exact objection. "Oh come, on being 0.1% off is normal for stablecoin." Indeed it is -- but not in a persistent fashion!
Disclaimer: I closed out my Tether longs last week.