Understanding Tether’s Peg and Reserves and How They Work -Breaking
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Understanding Tether’s Peg and Reserves and How They Work- How to maintain Tether’s stability.
- Tether’s reputation and transparency.
- These financial reserves are safe, liquid and prudent.
Given that Terra’s peg has fallen, it’s reasonable to wonder what prevents Tether (USDT) from following the same path.
USDT can be used to create, use, and secure collateral. Terra was a computable stablecoin that wasn’t fully collateralized. The coin includes many stabilization-inducing mechanism, however they all fail in the end.
USDT can be fully secured without credit risk. Tether can exchange USDT for dollars. Investors can purchase USDT at discounts and then redeem the USDT with Tether to turn a profit.
USDT may drop to or even exceed $1 during periods of market volatility. It does not necessarily mean that the peg was broken. This indicates a higher level of liquidity that what’s on the order books for this exc
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