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“These stablecoins” lumps together some very different implementations of “thing that is always worth $1”.

USDC: fully collateralized by cash or cash equivalents held in US banks - basically a money market fund

Terra: partially collateralized by crypto assets + algorithmic magic

Tether: like USDC but not held in US banks, and the actual collateral may be partial or of lower quality

Dai: overcollaterelized by crypto assets + algorithmic magic

These are really distinct things and your risk model for each of them should be different.



You neglect to mention that Tether's alleged assets have not had a reputable audit published in a long time. And that the people who control it have already demonstrated an ability and willingness to utilize those assets for whatever they please.

"The order further finds that Tether and Bitfinex’s combined assets included funds held by third-parties, including at least 29 arrangements that were not documented through any agreement or contract, and that Tether transferred Tether reserve funds to Bitfinex, including when Bitfinex needed help responding to a “liquidity crisis.”"

https://www.cftc.gov/PressRoom/PressReleases/8450-21


> basically a money market fund

When money market funds were all about to break the buck in 2008 the Treasury department stepped in with a $50 billion insurance program and the Fed started buying commercial paper to prop them up. Will they do the same for USDC?


I don't know, and you should include that in your personal risk model. "basically a money market fund" is certainly not intended to suggest a certain level of safety. It is a comment on the structure of the asset.




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