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1/ if a stablecoin falls in value and no one is there to audit it, are the reserves actually there? nobody knows. all jokes aside, i've been ignoring stablecoins but threw together this little chart on the current crop of stablecoins. turns out $1 does not always equal $1.

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Jesse Powell

@jespow

Oct 19, 2018

Some of these rates are off, distorted by being paired with USDT. Try getting $20 out of an ATM and you’ll see the same phenomenon. With the $2 fee, your rate is 1.1 BankUSD for 1 CashUSD. In crypto, fee is in the spread.

husam.eth

@drhus

Oct 19, 2018

If you believe Tether is solvent why don't you buy $100 millions $USDT at current rate of 0.96

@krakenfx

and make yourself some sweet $4 millions tonight? You don't pay fee neither

It's not only about solvency risk. We have to consider the time value of money, opportunity cost, Taleb Distribution, etc. Even if Tether is 100% solvent, it doesn't mean that we'd be able to exit the position with an improvement on our PnL.

husam.eth

@drhus

Oct 19, 2018

What position you are talking about? Can't you just send USDT to Tether Limited and they wire you the USD next morning?

Replying to

I don't know but that seems unlikely given the current spread.

4:07 AM · Oct 19, 2018Twitter Web Client

Replying to

How is the spread linked to withdrawals ? 🧐 If it is backed, it is backed, and people are withdrawing with a certain market discount based on the spread, but that's their choice

Jesse Powell

@jespow

Oct 20, 2018

If withdrawals were coming quickly for 1:$1 redemptions the USDT/USD spread on exchanges would be reduced. Yes, it is their choice to essentially pay a fee (by selling below the peg) to have the money right now, just like you do with an ATM vs waiting around at your bank.

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