Tony D’Addeo
@deodad
how do the major stable coins maintain their price? more specific the answer the better
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Tony D’Addeo
@deodad
these are the details I want to understand https://warpcast.com/moe/0x6324d8ac
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Dan Romero
@dwr.eth
USDC has regular public audits available. If you don’t believe Circle and Coinbase are able to redeem $1 for each 1 USDC, then someone who does will be willing to buy it from you at the discount essentially risk free. Thus the discount is below the clearing price for it to make sense.
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D-wayñe 😇💜
@drrrner.eth
USDC and USDT stay near $1 because issuers hold reserves mostly short-term U.S. Treasuries and cash for every token. Market makers arbitrage: if price drops below $1, they buy and redeem for $1; if it goes above, they mint and sell. DAI’s different it’s overcollateralized with crypto (mostly ETH). Smart contracts enforce liquidation if collateral value drops too low. It’s more decentralized, but less stable under stress.
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MOΞ
@moe
arbitrage? if usdc falls to .99 then someone can buy it on open market then redeem with circle and get 1.00, the buy tx increases the price on the open market. if it goes to 1.01 then someone can issue new usdc with circle and sell it on the open market for profit moving the price down.
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jp 🎩
@jpfraneto.eth
i agree with this question https://warpcast.com/jpfraneto.eth/0x50da0f24
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C O M P Ξ Z
@compez.eth
Fiat-Collateralized!
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