USDT deep trust swamp, other stable currency but also just about the same

The hash sent (ID:hashpie), author: LucyCheng, the daily planet authorized forwarding.

 USDT deep trust swamp, other stable currency but also just about the same

The author | hash faction LucyCheng

In the absence of competitors in the 2017 to 2018 years, USDT has long occupied more than 90% market share stable currency. At that time, driven by government regulation is not clear, some attitude around the legal tender ways to trade background more austerity, let USDT less than two years will achieve nearly 300 times the market value growth; influence is reached, can shake the encryption money market abnormal fluctuation degree.

 USDT deep trust swamp, other stable currency but also just about the same

Figure USDT: changes of market capitalization and trading volume over time; note: the 2018 year 10 month 16 day afternoon, USDT prices caused panic in the market, bitcoin prices soared, just a couple of hours or over 15%

However, after the super good times don’t last long, October, questioned the currency price collapse, access difficulties, flash $official website instructions to modify and so on negative events, USDT reputation fell one after another, the stability of other currencies to take cities and seize territory. Stable currency by TUSD, PAX, GUSD, USDC, DAI in the LED market issuance and trading volume rose significantly, the current co occupied a market share of more than 25%. These persons are taking advantage of later development to compete with USDT’s powerful competitors; but can not be ignored is that the safety and credit risk is not USDT patent, there are also other stable currency related issues.


 USDT deep trust swamp, other stable currency but also just about the same

The current USDT occupy a stable currency market share of 66.6%; while USDC, TUSD, PAX, DAI and GUSD accounted for 7.5%, 6.8%, 3.9%, 3.1%, 2.2%.

Currency exchange between deposit and short board

As a medium of exchange encryption currency, currency stability can be broadly divided into statutory currency mortgage type, digital asset mortgage and unsecured bank algorithm types (for more information, please see previous article “USDT premium serious? There are N stable currency option “). Based on stable legal tender coins in addition to value and hedge function, its main function is to provide investors with legal tender world interface.


 USDT deep trust swamp, other stable currency but also just about the same

The picture from the whale quasi Research Institute

But highly centralized management and operation in the can with the opaque USDT $1:1 effective exchange rate has been questioned; and recently Tether official reserve assets structure and change of Bitfinex USDT and USD access difficult events, while the solid market on its dollar reserves charges. Although the stability of currency issued late most are the introduction of trust accounts and audit institutions to improve their transparency, but the exchange between them and the defects of legal tender.

Specifically, by the process of foreclosure and the lowest for the amount of the limitationof, most ordinary users looking for OTC platform for the new currency; currency stable on-line for a short time, currency exchange platform currently supports the relevant currency is relatively small. The daily trading volume of up to hundreds of millions of dollars CK. USD as an example, the support of its OTC transactions only BCEX and Allcoin two platforms; and provide $PAX trading channel large exchange only ZB.COM.

In order to alleviate this situation, TrueUSD announced the launch of real-time accounting service and automatic instant redemption function this month; let the user to redeem the address to send TUSD, can immediately receive the TrueUSD automatically registered bank account remittance refund. But the service only to the redemption amount is greater than $one thousand registered users open (earlier minimum standards for $10 thousand).

Of course, the market also exists, stable currency without redemption limits such as PAX, but as said above, the average processing time is longer the whole process, not for the immediate withdrawal of investors. The person in charge according to TUSD Asia said, part of a stable currency and even the existence of the redemption process is too complicated, traders do not know how to operate the.

There are more or less credit problems

But a stable currency redemption problem, in addition to the above mentioned currency exchange channels lack, recently there is another event worthy of attention — Gemini unexpectedly close to redeem GUSD OTC account currency stability. Although the events in both sides settle a matter by leaving it unsettled in silence, but it proved last year community on PAX and GUSD, questioned the two by the United States government regulation of the stable currency.

According to the reported September last year, John Backus Ethernet square community developers in the PAX code to find a “setLawEnforcementRole” function. He said that the existence of function means that the use of any of the people who create new etheric Fang address, have on the circulation management of PAX power, can be frozen wallet (address) and destroy relevant tokens.


 USDT deep trust swamp, other stable currency but also just about the same

 USDT deep trust swamp, other stable currency but also just about the same

The above is the specific code of setLawEnforcementRole. With a slash mark comments, confirm the design purpose of these functions (picture from: TheNextWeb)

Because the PAX is the first batch of the same type of stable currency approved by the government of the currency, many people think that setting and the NYDFS function of setLawEnforcementRole supervision; for the same batch of approved Gemini USD is suspected of setting permissions. Of course, these concerns has not yet appeared, did not bring a greater impact on the market; but can make investors aware of audit and supervision, transparent complete stable currency greatly reduce the credit risk at the same time, will also bring another crisis of confidence.

But the capital reserves transparent can not prove that there is no black box operation may, from the beginning of your foreign traders broke the outfield will be able to know, Gemin and Paxos Exchange last year around December was to provide benefits to encourage private traders, they choose their currency stable. Coincidentally, PAX and GUSD of the price volatility in mid December, the market value of GUSD is still on December 17th soared from $87 million to $103 million nearly 20 percentage points. Therefore, the legal currency mortgage currency stable, even if the transparency is not credible, in essence, the center of the management and operation of the currency market manipulation may have more or less, only the use of methods and different aspects.


 USDT deep trust swamp, other stable currency but also just about the same

The change of GUSD price and market value over time (picture cut from: Coinmarketcap)

As for the digital asset backed currency stable, although is used to the operating mode of credit center, but the problem still exists. If the mortgage or digital asset mortgage mechanism is not credible, the user’s willingness is not high. For example, the birth of four years is still tepid BitCNY: in order to ensure the value is always anchored system set up high mortgage, compulsory liquidation mechanism and so on, but this method has some defects, prone to serial forced liquidation and market supply constraints, thereby greatly reducing the user’s exchange enthusiasm; because of this, the earlier AEX exchange gave up BitCNY trading on.

The price is not stable, long-term anchor is a common phenomenon

Of course, this does not blame BitCNY, compared to seize the traffic, to stabilize the currency price stability is more important; without trusted legal assets support digital assets mortgage money only to ensure the stability of currency and currency prices anchored through the perfect operation mechanism. Of course, this is also the current rapid development of the DAI are problems.

DAI is a MakerDAO Ethernet based on stable currency issued by Fang, digital asset collateral enough, keep the anchor and $1:1. But until now, the price of most of the time wandering on less than a dollar. This MakerDAO has repeatedly consider adding DAI stable currency costs, to eliminate the current upward pressure. But the rising cost of stability in the end will have what effect on the DAI and US dollar anchor, now also can make nothing of it; the same with other similar stable currency situation, “how to set up a mechanism to ensure the legal tender price and always anchor” on this issue, the MakerDAO team is still in the exploratory stage.

 USDT deep trust swamp, other stable currency but also just about the same

The DAI value and the price varies with time (photo from Coinmarketcap)

But the price is not stable, long time anchor is a common phenomenon in the existence of stable money market; not only is the digital asset mortgage type stable currency, stable currency currency cannot ensure that always anchored on.

If the price in October, excluding flash collapse bankruptcy and so on black swan event, USDT can be said to minimum and the price volatility closest to the stability of the dollar coin. The characteristics of opaque information enhanced the mobility of USDT to a certain extent, thereby inhibiting the market premium phenomenon; while TUSD, GUSD, PAX, USDC and so on information more transparent and stable currency, affected by the market liquidity is limited and lack of market and policy factors, under special circumstances can not timely respond to market conditions and for this adjustment, widespread premium.

 USDT deep trust swamp, other stable currency but also just about the same

Data source: Coinmarketcap

 USDT deep trust swamp, other stable currency but also just about the same

Add egg: after mid May 2018 announced an TUSD coin currency information, TUSD prices soaring, or even outperform most of the better competitive currency. In order to ensure the stability of currency, currency an on-line time delay TUSD decision.

In addition, the algorithm is a digital currency bank without any collateral loans worth mentioning. In theory, this algorithm by control of the circulation right class reserve currency stability, can make their own values as close as possible linked to the value of the assets. But the classification of the first stable currency Nubits from the year 3 month 2018 dollars and serious anchor, the current price has continued to fall below $0.06; and then the relevant currency is still in the development stage, which concern the star project of Basis, but also because of regulatory problems may have been shut down indefinitely.

 USDT deep trust swamp, other stable currency but also just about the same

Note: the Basis team at the end of last year in its official issued a document that the project supervision, suffered resistance, decided to stop operations and most of the funds will be returned to investors

The market appears to be exciting, but false prosperity

In the third quarter of 2017 as a turning point, USDT in the background part of investors’ lack of ways to trade the currency, with its first mover advantage to seize the market quickly, and in the encryption currency investment plays an increasingly important role. With the recent continuous fermentation of the big brother of the black material, other stable currency market trading volume and spare no effort to catch up, the rapid growth in the visible speed. The bear under the haze, stable currency market scale is still expanding steadily, is 2019 in the first quarter has 10 team includes major institutions and industry giants, has announced the launch of a new, stable currency plan.

Only in the USDT market share is still strong today, the potential crisis of other stable currency has not been found or not concern. When the scale of their market and the use range is sufficient to produce a greater impact on the market, the problem will always be onto the table. Even so, in the absence of legal tender interface and new hedge digital assets has not yet appeared in the market environment, users will still use these “problems” as the most stable currency; investors cannot do without USDT.

Reference material´╝Ü

[1] “PAX and GUSD discount subsidy War: market opportunities or interests? “, the value of carbon chain

[2] “stable currency revival, TUSD launched a small automatic currency redemption mechanism”, the daily planet

[2] David Canellis, PAX stablecoin has backdoor for freezing “and seizing cryptocurrency”, TheNextWeb.

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