Welcome to Incremental Social! Learn more about this project here!
Check out lemmyverse to find more communities to join from here!

makeasnek ,
@makeasnek@lemmy.ml avatar

The previous poster is alleging BTC is being "pumped" by tether because tether is collateralizing their coin by buying BTC. I'm pointing out that they also buy USD yet nobody is complaining that USD is being pumped.

If you buy a stablecoin, the hope is that the stablecoin is tied to an actual dollar (or whatever it is supposed to represent). This means if you buy $1 in tether, tether should buy $1 USD on the open market, put it in a vault, and wait until somebody else comes back to sell that dollar back to Tether. But you can buy other stuff too, other assets, which when you start managing large amounts of money is important for risk management. Plus they can make some returns that way. Some stablecoins pass the returns on to people who hold the stablecoin. Generally, these stablecoins are collapses waiting to happen for these and many other reasons.

  • All
  • Subscribed
  • Moderated
  • Favorites
  • technology@lemmy.world
  • random
  • incremental_games
  • meta
  • All magazines