[m00dy]

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

[lozenge]

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

[m00dy]

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.

[lokedhs]

Have they ever accepted any redemption?

[londons_explore]

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

That's what keeps the price 1:1.

[yieldcrv]

the trading activities are separate from the redemption window

[londons_explore]

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...

[yieldcrv]

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.

[m00dy]

you mean arbitrage?