If i had any tether I would sell it all right now, on the off chance that tether is in fact not fully backed.
In the end there is no upside to holding it, so even small risk is unnecessary
Tethers collapse or fall from the peg would be such a contagion within the entire crypto ecosystem. I would think all crypto holdings are at risk if there are large adverse findings in the disclosure.
Theoretically, USDC is backed (or more backed) by dollars.
I'm not sure why anyone has ever held a Tether for even 1 second. Even if you believe in it 100% - why not hold something other people believe in more?
"Grant Thornton has switched from calling the $52.3 billion stablecoin’s reserve accounts 'correctly stated' to the more equivocal 'fairly stated.' Here’s why that matters."
I don't know why they all need to play this game. I guess because of their terrible performance after the IPO, they feel the need to make returns and using the reserves for riskier investments is just too tempting.
I'm surprised somebody like Chase hasn't started their own stablecoin and proven openly: we're backed 100% by T-Bills. We get some profit from holding your money, but it's small and safe. Why do they all have to be shady?
I suspect that if any bank tried to push out their own Crypto the Fed would have /Questions/ for them and in general it wouldn't work out well for the bank in question.
People don't hold tether because they love tether. They hold it because they need it to trade crypto. So you need to balance the risk of tether being a scam with the opportunity risk of not being able to trade because you don't hold it.
(This is an analogy, but it's almost literally the reality for a massive global market that not seen by the mainstream)
I'm not sure where you would read about it. It's like this... Bahamas dollars are pegged 1:1. They can be spent interchangeably in the Bahamas. You can redeem them 1:1 in the Bahamas. Very credible.
But most people are not in the Bahamas, and can't redeem them where they are. The Bahamas won't let just anyone in, and it's expensive to go there anyway. (Oh sure, if you're American and live in Florida it's no big deal, but if you're Chinese or Indian or something it's a big pain in the ass) There are money changers in other places that will take Bahamas Dollars, but they'll only take your B$100 notes and you're looking at like 4% loss to sell them, and for all your 20s, 10s, etc nobody will give you more than 50% for them if they will accept them at all. So these things are somewhat redeemable if you're in Canada or France... but in many places they are not redeemable at all.
Or you could use this other thing called Tether that just works. It costs 0.25-0.50% to turn into local currency if you're talking $10,000+ amounts. It can be done in almost place on Earth where you have running water and electricity.
GUSD is basically like B$. So given that reality, it's a no brainer to take Tether over GUSD, even if you think Tether is shady.
This is also something I didn't get about Tether for a long time... it's actually successful because its operators are shady, not in spite of it. They have been doing whatever it takes to maintain actual liquidity, and has done so for years. Gemini does not, it just sits there and brags about how it could totally pay everyone back if it wanted to.
Somebody has been redeeming huge amounts in the past 3 days, maybe someone knew what was up. You'd definitely want to redeem before they have to resort to those El Salvador IOUs at the bottom of the reserves pile.
The "honest" yield of on-chain lending protocols has decreased significantly through the year since it mostly came from lending to leverage traders. For example, USDC yield on Aave is down to ~2.8%, I think Compound's stable yield has been down to <1% for a while.
There are other sources of yield, such as Gemini Earn (6.5%), which lend to larger trading firms. Those feel riskier since they're more exposed to systemic collapse in crypto and lock up your dollars with a long withdraw delay.
Then there are the ponzi yields (10-40%), like the recently collapsed UST and the soon-to-collapse USDD and USDN. I think it's obvious why those are a bad idea.
Nit: Gemini's highest yield is 6.9% on their Gemini dollar stablecoin[1], and the withdrawal delay is promised to be at most five business days which they were able to adhere to (not that that's not long, depending on what you expect, just wanted to quantify) during last week's LUNA crisis.
I withdrew everything from Gemini Earn since I have no idea whether Genesis Trading, who borrows through Earn, would survive a significant loss of USDT peg.
USDC on Aave, Compound, or Curve all seem much safer.
Right but I'm only seeing pretty low interest on those platforms, which doesn't compensate for the risks of smartcontracts and going outside the usual financial system. Did you have a specific one you think is worth it?
For example, on Compound, USDC only pays 0.82%, or 1.3% if you count the COMP token rewards.
Also I don't think you can invest just in USDC on Curve, you have to do a pool that exposes you to some other currency, although I think DAI is solid and Curve has a cUSDC/cDAI pool:
GUSD's site claims audits - under a heading titled "Review the Gemini dollar reserve-funds independent accountant audits" but links to attestations (example: https://assets.ctfassets.net/jg6lo9a2ukvr/3ZfEIugZkOLsArm4JK..., "conducted in accordance with attestation standards").
Same fraudulent trick Tether pulled for years. They're not the same thing.
Attestation: "Joe has $1,000 in the bank."
Audit: "Joe has $1,000 in the bank, but it's a loan from their brother, they just got fired, and a $2,000 mortgage payment is due tomorrow."
The main risk of being in that pool is that you might get stuck with GUSD which you would have a very hard time getting rid of unless you have an account with Gemini, and even then, I've heard of them refusing to redeem GUSD for USD to people who actually bought GUSD directly from them with USD.
The secondary risk of being in that pool is if any of the 3pool assets die. You'd have to hope to be automated enough to be out the door with the good ones.
Finally, the reward for being in there is the marketability of the CRV which is the lions share.
From what I can tell there is only a GUSD/3CRV pool. This means you will be exposed to GUSD, DAI, USDC, and USDT. If any of these depegs you will lose money because your DEPOSIT_AMOUNT USD worth deposit will turn into almost DEPOSIT_AMOUNT of whatever coin depegged. There is also risk of there being a vulnerability in a smart contract.
As an additional data point one of the higher yields for USDC alone seems to be based off doing a recursive lending strategy on Valas which at this current point in time has about a 6.9% APY.
Let's say it's 70% or even 50% backed. The withdrawals so far are are about 10% of its holdings. Won't we have to wait for another 40-60% draw down to find out if it's not fully backed? Seems like so far, anyone who wanted out, got out.