|
|
|
|
|
|
by sunshine-o
229 days ago
|
|
|
> when market demand of tether is too great the value goes about $1.00 and the organization relies on arbitragers to deposit more to cause the minting of Tethers at $1.00 and selling it into the open market if the price is above $1.00 pushing the market rate back down to $1.00 I'm not sure of this.
USDT can only be minted by tether [0] (line 406), hopefully when they acquire more treasuries. I am not exactly sure where the price of USDT come from and I am pretty sure there is not only one. But I would guess it is an aggregate of the prices on exchanges. The chainlink oracle [1] is probably the most authoritative one. - [0] https://etherscan.io/token/0xdac17f958d2ee523a2206206994597c... - [1] https://data.chain.link/feeds/ethereum/mainnet/usdt-usd |
|
|
when tethers and trading at $1.04 or anything higher than $1.00
arbitrageurs wire money to their account at the Tether organization (bitfinex, otc services) to instruct the organization to mint Tether
the organization does everything necessary: takes the deposited money and buys US treasuries, mints the equivalent amount of Tethers and gives those tethers to the customer
The customer deposited $1 and received 1 tether. Some exchange venues have people rushing to buy 1 Tether for $1.04
Customer sells their tether to them and has some other form of crypto that they can try to get back into dollars and do it all over again, until flooding the market with Tether supply back to $1.00
this happens all day every day for a decade, more pronounced during panic selling periods