[thkim]

I think Tether can get away with less than 100% collateralization. At the current market cap of 82bn, even if they are only 20% collateralized, it takes 16.4bn one way movement to deplete their reserve. Is that likely event? Guess it depends, but I think market makers would be more willing to backstop them than UST shitshow. UST has "death spiral" structure that makes MMs less willing to backstop them once it goes on a path, which is exactly what hedge funds attacked against these past few days.

[phire]

All that Tether really need is for enough people to believe that they probably have enough collateral to handle any potential bank run. Those people will buy up discounted tether and prevent the bank run from even happening.

Though, the mess with TerraUSD has clearly knocked a bunch of people's confidence in Tether. I wouldn't be entirely surprised to see it crash.

[mrep]

Isn't that what the banks said before their first bank run and then the government had to step in to back peoples deposits to ease their worries. The government isn't backing these deposits.

[lmm]

The sharks still smell blood in the water. If there's money to be made on the other side, the other side will be able to get all the capital it needs.

[ironlake]

A lot of people have looked for conspiracy or motivation around the Terra Luna crash, but the real answer is if you can legally make money by making something crash, then someone will make it crash.

Terra Luna was a slow antelope on the savanna.

[maxerickson]

That would be okay if they called the currency lever.