Paolo Ardoino CTO of Tether in a meeting sponsored by @tether_to on the social network Twitter in which Adam Back, Samson Mow, Gabor Gurbacs also participated, indicated that Tether has never fallen in terms of value.
The key that the stable currency still maintains liquidity is due to the support that the project has in legal tender fiat currencies and other financial instruments that allow the project to stand.
Paolo indicated in the conversation that Tether is not an algorithmic stablecoin, so it cannot be boycotted with circular flows of money in and out in the ecosystem to bring down the project, and these attacks are supported by the capacity that Tether has backed in the Fiat ecosystem.
What happened with Terra and Luna, is that it started to grow so exponentially without being covered in any way.that the same market caused a gap to open between buying cheap ust on the one hand and on the other hand the reward for selling it expensive and obtaining Luna, in such a way that something cyclical and nosedive was done together with the market.
Tether for its part has withstood this onslaught, liquidating billions of dollars driven by the euphoric trade that Terra produced and the panic engulfed in the market.
At the meeting organized by Tether: “Current developments in the cryptocurrency and stablecoin market.” In the meeting, certain points of the types of stable coins were discussed, ensuring that Tether, being a centralized currency, has a sufficiently liquid leverage that has allowed it to be efficient from the simplest withdrawals to the largest withdrawals.
Paolo indicated that what happened with Terra served to reliably demonstrate the difference between a stable currency that really is and another that just because it is called that is not necessarily so. He also made reference to the fact that an algorithmic coin cannot be taken as a stable coin since it is only backed by a percentage in Bitcoin. What this project revealed was that the market is not prepared to absorb such capacity to liquidate funds.
Paolo repeatedly insisted and emphasized Tether’s ability to respond to all the withdrawals that users were makingsince being a centralized currency, each token or currency is backed by fiat dollars or collateralized in such a way that it is impossible for it to repeat the path of Terra.
He also argued that it is evident that what happened was an attack on the Terra project, and since it was a project still with liquidity weaknesses, it fell that way, and he felt that whoever did it tried to do it with Tether but it was not effective precisely because of the multiplicity of layers that tether has and that allows maintaining the parity that each dollar is really worth 1.00 dollars.
That kind of security can only be guaranteed by a robust project like Tether, and although they receive requests for transparency about what are the assets that support the liquidity of the project, The truth is that from 2014 until now stablecoins went from being a couple of million dollars to being worth more than 150 billion dollars, which has a positive and negative impact on the market depending on the type of project it is. In such a way that Tether ceased to be a centralized stable currency, to be the largest in the ecosystem.
At the same time, he indicated that they are all believers in crypto assets, and that when one of them is attacked it is an attack on the ecosystem and therefore on all the projects, which makes us reflect on the versatility of the projects and their security in order to know how to react to such a thin market in which the Speculation and panic play a fundamental role.
He further added that being in a crypto project backed by a decentralized stablecoin is also not a great idea as a massive token burn can occur and the stability of the unbacked decentralized currency is in jeopardy if that massive token burn is not absorbed by the market. tokens.
He indicated that Tether is nothing more than having a dollar in the blockchain, and because it is that simple, not only does it have a backed value, but in addition to that, it has become a tool for the entire ecosystem and that growth is what rescues, beyond the failed attempts they have made against the project to make it succumb.
He reflected on the projects of algorithmic stable currencies, as well as the projects of public stable currencies, and in this sense indicated that there are specific things to take into account, one of them is related to the nature of the project, if it is a public stable currency anchored to a national currency, he considers that the mutation from the physical to the digital must be carried out, since it does not make much sense for countries with unstable economies to stop having unsupported fiat money that generates inflation effects because the market does not have investment certainty, to transfer them to digitization without the same support, which ultimately does not solve the problem, in any case it can make it worse.
The truth is that the situation with Terra has once again created a chasm between investors and crypto projects, which represents a major problem for the development of the ecosystem. Investors will now be more cautious to prevent money from disappearing in a sharp drop in the market, in which billions of dollars have been lost due to the weakness shown by the project.
The meeting ended with the certainty of having a centralized stable currency that has precisely allowed to guarantee more than 600 million dollars in transactions and withdrawals caused by the fury and panic of Terra, but convinced that as long as Tether continues to guarantee that USD 1.00 is really a dollar, the project will continue to grow and expand and this thanks to the support in the United States Treasury bonds among other commercial documents that support the issuance of the tokens.
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