Hacker Read

m00dy | karma 1640 | avg karma 1.88 · 2023-03-12 03:39:54

I understand but as far as I know, Tether has never refused a single customer for redemption.

lokedhs | karma 2892 | avg karma 2.22 · 2023-03-12 03:44:35

Have they ever accepted any redemption?

londons_explore | karma 35497 | avg karma 2.72 · 2023-03-12 03:50:09

They redeem via a trading bot on most of the popular markets.

That's what keeps the price 1:1.

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yieldcrv | karma 3087 | avg karma 0.64 · 2023-03-12 04:58:10

the trading activities are separate from the redemption window

londons_explore | karma 35497 | avg karma 2.72 · 2023-03-12 06:06:52

No - thats what I'm saying. They use a bot to buy/sell USDT to keep the price 1:1... And then they redeem anything purchased by the bot.

Effectively, they will redeem only for themselves.

Could be a neat way to do no KYC or ownership verification or dealing with messy bank transfers to dodgy people, etc. Hides the location and/or existance of funds from redeemers and those able to trace money movements too.

Or could be a way to hide a delicately balanced stack of cards...

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m00dy | karma 1640 | avg karma 1.88 · 2023-03-12 07:06:47

you mean arbitrage?

yieldcrv | karma 3087 | avg karma 0.64 · 2023-03-12 11:31:07

I don’t find market making or liquidity providing to be controversial

it still requires capital from their reserves to do what you describe, purchasing USDT for $1 each

the redemption mechanism is an incentive on its own. when Tether is below $1 purchase it yourself (pushing up the price of Tether) and go to the redemption window and get $1 for it regardless.

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lozenge | karma 5489 | avg karma 2.64 · 2023-03-12 03:55:51

Neither did SVB until one day, they couldn't any more.

m00dy | karma 1640 | avg karma 1.88 · 2023-03-12 04:40:57

yes but crypto has had billion melt downs SVB has only one.

and the other thing is that. If I had a business like Tether, believe me I would be counting every single cent in my holdings 7/24/365.

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