Monsterplay
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Monsterplay

How stable are Stablecoins during a market crash

Which is the safest Stablecoin?
  • Can we really trust the quality and accuracy of the collateral audits;
  • How liquid are the Stablecoins during periods of high redemption volumes;
  • With fresh memories of the Terra Luna UST Algorithmic Stablecoin collapse, where are the technical and smart contract issues in fiat backed Stablecoins;
  • If Fiat-backed Stablecoins are truly 1:1 liquid, is there a real risk of depegging?
  • There is an unlikely, but real, potential for exchanges to be blacklisted at request of law enforcement and political influence — how safe are customers’ assets on those exchanges; and
  • With tightening focus on KYC requirements by regulators, will investors be able to freely redeem Stablecoins for fiat.

‘Not your keys. Not your crypto.’

NOT ALL STABLECOINS ARE CREATED EQUAL

  1. Fiat-Collateralized Stablecoin
  2. Asset-Collateralized Stablecoin
  3. Basket of Cryptocurrency-Collateralized Stablecoin
  4. Algorithmic Stablecoins
Source: Coingecko 17 November 2022
  • Link to USDT audit report
  • Link to USDC audit report
  • Link to BUSD audit report
  • USDT collateral incorporates Secured Loans (9%) and Other Investments (4%) with unknown details on their maturity details or their underlying security. USDT also lists Corporate Bonds and Precious Metals (4.6%) in their audited reports.
  • The USDT audit shows only $39,678,465,980 (58.3%) in US Treasuries.
  • By comparison USDC and BUSD have 100% of their collateral with the US Treasury Department as Bonds and also strong Cash Deposits.

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