Tether's 1.48B profit equates to a 7.9%APY
This is 67% higher than the risk-free rate.
The 7.92% APY alone should already ring some bells!
Most likely the extra return is associated to risk.
Risk that is taken by the depositor.
@JasonYanowitz
@garrytan
SVB will prob pay back ~90 cents on the dollar in about 60 days.
Startups can get a bridge from Brex to pay salaries till then.
Hard? YES
Extinction level event? NO
USDM is now truly permissionless.
If you are still paying the 5% stablecoin tax to USDC/USDT, you now swap for USDM, and keep it yourself.
No additional trust assumptions.
Not financial advice.
PREMIERE:
The overnight fed funds rate is 5.3%, but how much is going to your bank account? 🏦
How much are you getting from your stablecoins?
Martin Carrica (
@mcarrica
) is here to walk us through a world in which we can tokenize treasuries instead of just dollars👇
US Treasuries are paying 4.7%
Aave USDC is paying 1.2%
With
@OndoFinance
and
@FluxDeFi
this changes:
- KYC'd arbitrageurs will make ~7% APY "risk-free"
- Permissionless DeFi yields will reach: ~2.3%
Here is how 👇
1/ 📢 Introducing Flux Finance, the first decentralized lending protocol designed to support permissionless assets like stablecoins alongside permissioned assets like security tokens.
Proud to announce that Mountain Protocol and
@wintermute_t
have entered into a collaboration to bridge the liquidity gap between TradFi and DeFi markets.
Proud to announce that we are leveraging
@OpenZeppelin
Defender 2.0 to protect our new project, soon (tm)
The Code, Audit, Deploy and Operate modules have helped us maintain the best security practices and ship faster.
Learn more 👇
Announcing Defender 2.0, a mission-critical developer security platform to code, audit, deploy, monitor, and operate blockchain applications
Built for security and speed across all stages of the development lifecycle
Dive in and join the waitlist
Argentinians now breathe hope.
Execution is everything.
After the opening speech I am hopeful we'll have a chance to break the entrenched populism interests.
"No space for gradualism" - Javier Milei.
.
@MountainUSDM
$USDM combines the usability of stablecoins with the yield of TBills 🤑
Now live for trading on the permissionless pastures of CoW Swap!
I've got many questions on what Milei's potential dollarization means for crypto adoption.
I think it's bullish, specifically for stables.
Why?
Banks in Argentina have been isolated from the global financial system for decades, leading to old infra for fiat and securities
Stablecoins and Tesla both have the same market share.
1:150 cars is a Tesla.
Everyone agrees Tesla and EVs are the future.
1:150 US dollars is a stablecoin (peaked at almost 1:100)
Still so many people think crypto has no value.
Why?
First, we break the income statement by asset category. Some highlights
- Bitcoin: Massive win with Bitcoin Q1 appreciation
- TBill income is not even half of the profit.
- "Other": The unknow category has a worrisome loss of -40% 👈This is the really bad one
The MSM wants to portray crypto as a place for ML/TF.
The criminals themselves are opting out of crypto...too transparent for them, thus too easy to get cought.
Where could they be transacting instead?
Critical context missing from the
@WSJ
piece on Hamas and crypto:
In April 2023, Hamas warned its donors to STOP sending Bitcoin.
Why? Because the transparent nature of the blockchain had Western intelligence following their every transaction like bloodhounds. Hence, the
USDT being non-compliant to Financial Action Forces globally is a myth.
This morning USDT has frozen 70+ addresses (and counting) and the rate of addresses being frozen is accelerating.
Time to change the USDT criticism to something new.
Using plain Basel III, Tether is undercapitalized by 24%, or ~$750M
This is not as bad as it seems, since it will probably make that in Q2 just from the T-Bill portfolio, unless Bitcoin aggressively goes down in price.
This -40% performance is unlike any other major asset class in Q1, as seen below.
This raises the question: Is this token speculation? Is this startup equity? What is "Other"?
What we do know is that it is not a mainstream investment that would make it into most portfolios.
This is a great contribution to what crypto has to offer. The only thing better than a product that brings permissionless dollars to those who need them is one that also pays a competitive yield! The killer app of crypto just got even batter.
Unofficial reach out from SBF to the
@BanklessHQ
team.
"I hope this email finds you well. I wanted to reach out and catch up with you after the recent debate with Erik Voorhees and the collapse of FTX"
Now, if we adjust Basel III's aggressive cryptocurrency risk weight and assume Bitcoin matches Gold, the scenario is even better:
Tether becomes overcapitalized by 36% (or ~$650M).
This means Tether has better capital ratios than most (all) traditional banks.
But if the numbers are what we estimate, Tether might have actually pulled it off!
(pending what "Other" really is)
However, this is not financial advise. You can play with the numbers and assumptions here:
Margin trading rates are 3x higher in TradFi
1) Fidelity: 8.5% (or more)
2) Aave: 2.25%
With ~$600B in margin facilities in the US alone, $50B spent in interest could go down by $30B if you could bridge TradFi assets as collateral to Aave 🤔
This is the future of banking:
- 100% backed by the currency issuers' short term debt
- Passing through interest to the holder
- Internet speed
Congrats Wise!
Wise Interest launched in 6 EU countries🇳🇱🇪🇸🇫🇷🇫🇮🇦🇹🇱🇺
Hold ultimately 100% government-backed assets, keep spending like your current account and earn variable rate after fees.
£ - 3.43%
€ - 1.87%
$ - soon
capital at risk of governments defaulting, interest rates going negative.
But are not all banks risky?
Took a look at Tether were it a bank, looking at capital requirements, following Basel III (as best as we can with the data we have).
For nerds, here is the Risk Weights I used.
@ErikVoorhees
@LybraFinance
Hi
@ErikVoorhees
, founder of
@MountainUSDM
here.
Big fan of you and your work.
I understand where your concern is on the use of the word Permissionless - if there was a better word to use, I would.
However, most in crypto are converging into:
- Permissioned: blocked by default
What does this mean in practice?
It depends: "What is really in the collateral in Tether?"
In particular, what makes up the "Secured loan" and especially the "Other" categories.
Transparency on reserves (CUSIPs) would be highly welcomed.
As seen in the first figure, USDT is trading at a premium
The market is commanding 1.37% higher APY to take USDT risk.
This means that non-USDT suppliers believe that USDT could go to zero BEFORE the next 51 years, all other things being equal.
All of the above are built using
@VektorFinance
, the Bloomberg for crypto.
DISCLAIMER: I am not related to Vektor, just friends with the founders and really like the product.
Welcome back to Podcast Tuesday 🎧 🎙
We're excited to reveal Episode 11 of The Missing Link! Joined by
@MountainUSDM
's Co-Founder and CEO,
@mcarrica
, you won't want to miss this episode 🚀 Listen to the full episode here:
@LynAldenContact
Hi
@LynAldenContact
! Founder of
@MountainUSDM
here.
Unfortunately, "permissionless" is the language most people associate to tokens where addresses are allowed by default, unless blocked.
I understand the argument you are making, and we also spent some time trying to find a
The expansion continues…
Thrilled to announce that Coinbase International Exchange has secured regulatory approval from the Bermuda Monetary Authority (BMA) to enable perpetual futures for non-US retail customers.
@awilkinson
Professional interest groups (doctors, lawyers, teachers, pilots) will stifle enterprise usage.
Moats are not technical, most likely legal.
Japan's regulators learnt from MTGox
👎 MTGox collapse (2014) - consumers still waiting after 9 years
👍 FTX collapse (2022) - consumers already able to withdraw in less than 4 monts, first in the world
@CampbellJAustin
Worth the full read for anyone in crypto.
As an industry we will continue to get held at a higher bar precisely because we can measure.
Thanks
@CampbellJAustin
@Evan_ss6
@ryanberckmans
@MountainUSDM
Hey! Currently no DeFi use cases, but working to get this integrated everywhere.
What happened with stETH on LSDfi will happen with yield-bearing dollars
@leoxs22
@diego_defi
@buenbit
@MountainUSDM
Hola
@leoxs22
- DEX: semana q viene
- Redeem on chain: ningún issuer centralizado tiene esto, USDC, USDT, o cualquier otro va a requerir KYC para mint redeem
- Seguridad del mint wallet: como la evalúas de afuera? Pregunto de verdad
Como dice
@diego_defi
, cada uno toma sus
@ericrap71725940
@fhomoney
And DeFi needs products that are better than what they have today.
I think DeFi is properly going after those who are least served by Financial Services
Assuming an 80% LTV (same as USDC in Aave), arbitrageurs could leverage ~4x, via looping 7 times between OUSG and USDC, before getting into diminishing returns (maximum leverage would be 5x)
@mbeaudroit
@Paxos
Economics
El problema es q Paxos esta regulado por NYDFS y solo les dejan sacar tokens en Ethereum mainnet - para pagos el gas es demasiado caro.
Circle esta regulado como MTL/MSB y con eso hace lo que quiere y te puede sacar pagos en una L2 o alt-L1
@paoloardoino
@Tether_to
I support investing the USDT Reserves in BTC, as long as that is the over-collateralization portion (aka the "equity buffer"), as
@paoloardoino
suggests.
However, clear transparency on the reserves at a CUSIP level would come first on my list.
If this transparency existed,
@SebVentures
@jp_koning
@ErikVoorhees
Two things at play:
1) receiver bank will likely work your money a couple days before crediting...a free 2-day loan. Metric should be from account debit to account credit, not message processed.
2) median is a nice way to hide long tails. Would like to see the average, accounting
@SebVentures
@samkazemian
@DrakeEvansV1
This exists
@SebVentures
MercadoPago offers 93.1% apy daily rewards in ARS in arg. For reference RFR is ~100%, so taking ~10% margin.
The product is so successful that Congress wants to force ML to open the payment network for other fintefhs to participate.
@SebVentures
Anyone that has legacy depositors will prob opt for a two-timer system as you can cross subsidize.
Endgame the play is that the yield-bearing becomes the core tradable asset
@pablo_veyrat
@AngleProtocol
I would not underestimate the power of "do nothing".
Case in point,
@MakerDAO
DAI and sDAI have the same risk assumptions and sDAI has very good awareness, and still utilization is ~20%.
Finance is slow, most benefits are chronic and decisions involve emotions.
@HadickM
@Tether_to
Tether got their hands dirty early on with folks that actually need stables.
Those seeds planted years ago are harvested, regardless of the trading potential in crypto.
Retail is slow and steady.
@ErikVoorhees
@nic__carter
@MountainUSDM
@CurveFinance
Unlike closed systems, like a bank, you can start using USDM without asking for permission. This means anyone can integrate USDM in their protocol without asking us.
However, like most centralized permissionless assets (USDC, USDT, and also USDM), there are rules assigned.
For
With tools like
@chainalysis
, authorities are dissuading terrorist financing activities.
Groups like Hamas have opted out of crypto, voting with their money that the ATF efforts are working.
After watching some of the reactions to PYUSD, I decided to put together an explanation of some of the features involved to answer the most common points of confusion for everyone.
In no particular order:
What are the underlying assets?
In the NYDFS framework, the allowable
@OneTrueKirk
USDM is permissionless as in "you don't need permission to use it".
However, if usage goes against the T&C's, or when mandated by law, freezing is available. This is true for any regulated issuer (or any centralized issuer for that matter).
Exciting news! Leading Digital Asset company
@coinbase
announced today that it has received a Digital Asset Business Licence from the
#Bermuda
Monetary Authority.
I'm thrilled to see our island leading the “race to the top” for regulation in this industry, as our trusted
@pythianism
Margin Trading is a $600B industry in the US alone and have solved these issues from an economic side.
Esp when you go past tbills and add sp500, MBS/CBS and other assets.
The other challenge to add to the list is the trading only M-F market hours.
I hope
@rleshner
is solving