<story><title>Tether starting to lose its peg too, after Terra did</title><url>https://community.intercoin.org/t/what-backs-a-currency-terra-luna-drops-nearly-100/2518</url></story><parent_chain><item><author>Traster</author><text>The thing that I think some people miss about Tether is that it&amp;#x27;s not about whether it is backed &lt;i&gt;enough&lt;/i&gt; it&amp;#x27;s either fully backed or it isn&amp;#x27;t. If it&amp;#x27;s not, it&amp;#x27;s not a question of whether it&amp;#x27;s back enough to weather this storm, it&amp;#x27;s about whether the people running it &lt;i&gt;think&lt;/i&gt; they can weather this storm. If they think they can keep it running they&amp;#x27;ll sell whatever backing they have and keep the peg. But if they even think there&amp;#x27;s a decent chance they can&amp;#x27;t permanently sustain the peg then the best thing for them to do is take the backing and run, not sink it into a stable-coin they now know isn&amp;#x27;t going to work. That&amp;#x27;s going to happen &lt;i&gt;way&lt;/i&gt; before they run out of money.&lt;p&gt;Let&amp;#x27;s say for example, Tether is 20% backed and there&amp;#x27;s $100Bn  of coins so the backing is $20Bn, and people start flooding out of it. Let&amp;#x27;s say $10Bn floods out. So the guys running it have handed out $10Bn. They now have $10Bn left, and money is still flooding out. Do they really continue to hand over the cash or do they say &amp;quot;Well, the whole thing is about to explode anyway, I&amp;#x27;d rather keep the $10Bn cash I&amp;#x27;ve got left&amp;quot;. At which point the holders of the coin have to play &amp;quot;Find these fuckers and sue them&amp;quot; which will be difficult since they&amp;#x27;ve got $10Bn to fight&amp;#x2F;flee&amp;#x2F;hide.</text></item></parent_chain><comment><author>f0xJtpvHYTVQ88B</author><text>&amp;gt; Tether reserves the right to refuse registration to, to bar transactions from or to, or to suspend or terminate the administration of Services, Digital Tokens Address, or Digital Tokens Wallet for or with, any user for any reason (or for no reason) at any time&lt;p&gt;&amp;gt; Tether reserves the right to delay the redemption or withdrawal of Tether Tokens if such delay is necessitated by the illiquidity or unavailability or loss of any Reserves held by Tether to back the Tether Tokens, and Tether reserves the right to redeem Tether Tokens by in-kind redemptions of securities and other assets held in the Reserves. Tether makes no representations or warranties about whether Tether Tokens that may be traded on the Site may be traded on the Site at any point in the future, if at all.&lt;p&gt;&lt;a href=&quot;https:&amp;#x2F;&amp;#x2F;tether.to&amp;#x2F;en&amp;#x2F;legal&amp;#x2F;&quot; rel=&quot;nofollow&quot;&gt;https:&amp;#x2F;&amp;#x2F;tether.to&amp;#x2F;en&amp;#x2F;legal&amp;#x2F;&lt;/a&gt;</text></comment>
<story><title>Tether starting to lose its peg too, after Terra did</title><url>https://community.intercoin.org/t/what-backs-a-currency-terra-luna-drops-nearly-100/2518</url></story><parent_chain><item><author>Traster</author><text>The thing that I think some people miss about Tether is that it&amp;#x27;s not about whether it is backed &lt;i&gt;enough&lt;/i&gt; it&amp;#x27;s either fully backed or it isn&amp;#x27;t. If it&amp;#x27;s not, it&amp;#x27;s not a question of whether it&amp;#x27;s back enough to weather this storm, it&amp;#x27;s about whether the people running it &lt;i&gt;think&lt;/i&gt; they can weather this storm. If they think they can keep it running they&amp;#x27;ll sell whatever backing they have and keep the peg. But if they even think there&amp;#x27;s a decent chance they can&amp;#x27;t permanently sustain the peg then the best thing for them to do is take the backing and run, not sink it into a stable-coin they now know isn&amp;#x27;t going to work. That&amp;#x27;s going to happen &lt;i&gt;way&lt;/i&gt; before they run out of money.&lt;p&gt;Let&amp;#x27;s say for example, Tether is 20% backed and there&amp;#x27;s $100Bn  of coins so the backing is $20Bn, and people start flooding out of it. Let&amp;#x27;s say $10Bn floods out. So the guys running it have handed out $10Bn. They now have $10Bn left, and money is still flooding out. Do they really continue to hand over the cash or do they say &amp;quot;Well, the whole thing is about to explode anyway, I&amp;#x27;d rather keep the $10Bn cash I&amp;#x27;ve got left&amp;quot;. At which point the holders of the coin have to play &amp;quot;Find these fuckers and sue them&amp;quot; which will be difficult since they&amp;#x27;ve got $10Bn to fight&amp;#x2F;flee&amp;#x2F;hide.</text></item></parent_chain><comment><author>frostwarrior</author><text>Serious question, how can you sue over this kind of thing?&lt;p&gt;I thought the whole point of crypto is that it&amp;#x27;s not regulated. And that also meant that if you got screwed then you are SOL.</text></comment>