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What is Tether? Is the USDT Stablecoin Legit?

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Tether is a cryptocurrency pegged to traditional fiat currencies and backed 1:1 by reserves of these traditional currencies held in accounts under Tether’s control. There are currently Tether tokens backed by US Dollars (denoted by the symbol USD) and by Euros (denoted by EUR). A Tether token pegged to the Japanese Yen (JPY₮) is on the way. These reserves are guaranteed by the promise of regular audits of the reserve accounts by the Tether Foundation.

The mission of Tether is to bring the ease of transfer, record keeping ability and other benefits of a blockchain-based digital currency to traditional fiat currencies. This allows merchants or traders to convert digital currencies into their fiat value, transfer these fiat-pegged tokens as easily as other digital currencies, and price services or products in traditional currencies while avoiding the overhead of converting digital currencies into fiat currencies.

How Does Tether (USDT) Work?

Tether Limited, the business entity in charge of Tether, is responsible for accepting fiat deposits and withdrawals and creating and destroying Tether in accordance. They also manage the Tether website that allows storage and transfer of Tethers, work on Tether integrations with exchanges and other third parties, and have custody of the fiat reserves backing the Tether tokens. The Tether Foundation has said that it’s dedicated to transparency and will regularly publish public audits by external auditors to their Transparency Page.

The Tether transparency page on December 4, 2017

The Tether technology works by embedding metadata in the Bitcoin blockchain itself via the Omni protocol. The Omni protocol allows for the creation (or granting) and destruction (or revocation) of digital tokens represented by metadata on the Bitcoin blockchain. These tokens, including Tether, can be stored in the Omni wallet and their circulation can be viewed on the blockchain through the Omnichest viewer.

You can store, buy and sell Tether through the Tether mobile wallet site.

Who Uses Tether (USDT)?

The implication that Tether tokens can be treated as Dollars or Euros has led to the adoption of Tether as a major trading pair on most of the larger exchanges. Bitfinex, Bittrex, Poloniex, and Binance do not deal in fiat currencies at all but have dedicated USDT markets for most of the major coins. Traders use Tether to hedge their trades and to get in and out of the crypto markets they are trading in.

The circulation of Tether is approaching 1 billion tokens, and more and more are being created as more and more funds reportedly flow into the Tether reserve accounts. As the circulation of tether continues to increase, the use of these tokens as a replacement for USD and other fiat currencies as a store of value increases as well.

What Are the Concerns with Tether (USDT)?

As the use of Tether as a replacement for fiat currencies grows on major exchanges, the Tether price of Bitcoin and other currencies is now synonymous with the fiat price, meaning buying and selling with Tethers is influencing the price in “real” money. As long as a Tether is truly representative of a fiat note like the dollar, this isn’t an issue.

However, there are some concerns surfacing recently about the legitimacy of Tether’s reserves and as to whether the company intends to honor their promise of audits. There are a lot of rumors floating around about the relationship between Bitfinex (the largest cryptocurrency exchange by volume) and Tether, with allegations of money laundering, collusion, and fraudulent Tether “printing.”

Bitfinex and Tether have come out in the press and promised an accredited audit to squash these concerns, calling the claims slander and dismissing any allegation of wrongdoing on their part. Further articles on new developments related to these allegations are on their way and will be updated as we go along.

That being said, the Tether whitepaper addresses these concerns and others, like the possibility that Tether Limited goes bankrupt or that Tether Limited attempts to take off with the money. They note that nearly all exchanges and third parties who manage crypto assets face these same risks, and therefore they are not a special case.

They tout their accounting and transparency process to eliminate the risk of bad behavior on the part of Tether employees or leadership, and they note that in the event of Tether Limited filing bankruptcy the reserves of fiat backing the tokens themselves will remain safe and redeemable.

Final Thoughts… Legitimacy TBD 

In 2019, the Office of the Attorney General for the Southern District of New York announced an investigation into Tether Ltd, which as brought ghosts of the past into the mainstream conversation again. Whether Tether seemingly intentionally opacity in disclosing its USD collateral is mischief, strategy, or sheer mismanagement, the cryptocurrency and broader regulatory ecosystem are looking at this current investigation to shine some light. One argument posted on Medium positions Tether as being one of the greatest exit scams in motion, and is worth the read for those willing to explore further. 

Source: https://coincentral.com/what-is-tether/

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Supercar maker Mazzanti Automobili launches security token offering

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Italian luxury car manufacturer Mazzanti Automobili has launched its security token offering on regulated digital marketplace STOKR.

As part of the offering, Mazzanti aims to raise 999,999 euros ($1.2 million) on STOKR to develop a special edition of its hypercar model Evantra Millecavalli R.

According to a Feb. 25 announcement, Mazzanti’s STO will allow investors to purchase MZZ tokens, priced at 1 euro each. The token is issued by Mazzanti via Blockstream AMP, a platform for the tokenization of securities built on the Liquid sidechain of Bitcoin (BTC), which has been directly integrated with STOKR.

As part of the STO, MZZ investors will be able to receive a 50% revenue share in the sale of the Evantra special edition. The offering is available for select European countries, with a minimum investment of 50 euros, the announcement notes.

Mazzanti’s founder Luca Mazzanti said that the company has been considering running an STO for a while. The company initially announced its upcoming STO plans earlier in February.

In conjunction with the STO, Mazzanti also announced that the company will allow its customers to purchase all editions of the Evantra model with Bitcoin starting from Feb. 25. The move echoes Tesla’s recent move toward accepting Bitcoin payment for its electric vehicles. 

Based in Luxembourg, STOKR has been listing various STOs in compliance with capital market laws of the European Union. Last year, Germany’s Federal Financial Supervisory Authority approved ParkinGO’s offering as the first cross-border STO on STOKR.

Source: https://cointelegraph.com/news/supercar-maker-mazzanti-automobili-launches-security-token-offering

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Finance Redefined: Ethereum exodus continues as Binance ‘helps,’ Feb 17–24.

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The parabolic rise of the Binance Smart Chain has been all over the news this week, aided by a few seemingly unfriendly moves by the exchange itself.

It started on Friday, when Binance suddenly froze withdrawals of Ethereum-based assets for about one hour. Many interpreted it as a move against the blockchain and its ecosystem, given that the cited reason was “congestion issues” — something one hardly imagines is a problem for an exchange, unless they shoulder withdrawal costs for the user.

The day after, FTX started shaming Binance for excessive promotion of BSC on the exchange. Specifically, FTX was apparently “spending millions” in failed deposits that came over the Smart Chain but were meant for Ethereum. FTX’s accusation toward Binance, one of its investors, is that the exchange put BSC as the default option for withdrawing many ERC-20 assets, which caused a lot of failed deposits to FTX.

I can’t say I’ve ever noticed Binance Smart Chain being “the default option” for withdrawals. BSC is the first listed when you attempt to withdraw something like USDC, though it does not actually select the blockchain for you. Still, I can see how some newbies could get swindled by this. People overestimate the degree to which terms like “ERC-20” are known in the casual crypto community. Testing the withdrawal now, Binance forces you to go through a quiz where you confirm you know what you’re doing by selecting BSC. I have no idea when this was introduced, but it’s not impossible that it’s a response to FTX’s statements.

Overall though, there’s nothing inherently wrong with one company using its products to promote another of its products. From the official responses it seems that the Ethereum congestion incident won’t happen again because they “upgraded the systems.”

Cheap tricks would never be able to undermine Ethereum without there being an underlying fundamental weakness. And I think we’ve all had enough with Ethereum gas fees. I tried a non-Ethereum DeFi product recently, and it felt so good to pay just a few cents for a complete interaction.

Binance Smart Chain is already processing more transactions than Ethereum and has over 5 million unique wallets. Ethereum, with its much longer history, is currently sitting at 140 million wallets in total.

Ironically, Ethereum fans should secretly want the bull market to end right now. The longer it goes on, the more gas fees will remain high, and the more people will want to migrate away and seed other environments.

Second largest liquidation day in DeFi history

Speaking of the end of the bull market, a massive slide in crypto markets triggered some $24 million in liquidations on Tuesday, the second highest loss in DeFi history. It would’ve been the highest if not for that infamous day in November when Compound thought Dai was worth $1.3.

The firesale was triggered by nothing in particular, though I suspect that rising bond yields are having their effect on the riskiest of assets on Wall Street, of which Bitcoin is the quintessential representative. And then Bitcoin dragged the rest of crypto with it.

I don’t normally talk about price because I’m not a financial advisor or even a successful trader. But I am feeling a lot of fundamental and sentimental indicators of a coming correction, ranging from a wavering stock market to, well, the strength of Tuesday’s dump.

To top it all off, my non-crypto feeds are being invaded by crypto stuff, which is never a good sign. I certainly hope that I’m misinterpreting what is actually unprecedented adoption and acceptance, but let’s face it — it’s all about price for now, while fundamentals are still lagging.

With layer two platforms and new blockchains coming online, we may get something useful out of crypto and DeFi soon. But everything could happen before we get there. Be especially careful right now and, most importantly, don’t get liquidated.

In other news

Source: https://cointelegraph.com/news/finance-redefined-ethereum-exodus-continues-as-binance-helps-feb-17-24

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Blockchain soccer gaming startup Sorare raises $50M

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Sorare, a major blockchain-based soccer gaming platform, has raised $50 million from high-profile investors backing major companies like Twitter, Instagram and Discord

The fresh Series A round brings Sorare’s total funding to $60 million, the company told Cointelegraph Thursday.

The funding round was led by Benchmark, an investment giant famous for funding companies like Twitter, Uber and Snap. Accel Partners was another lead investor, known for backing companies like Facebook and Spotify. The round also included some additional investment from investors like Reddit co-founder Alexis Ohanian, VaynerMedia CEO Gary Vaynerchuk, and Barcelona striker Antoine Griezmann.

With the new funding, Sorare is planning to continue growing its ecosystem, including launching a mobile application and onboarding the top global 20 football leagues. “We’re designing an experience where fans can celebrate, share, and live football moments at a deeper connection. We’re making fantasy football a reality,” Sorare said.

Founded in 2018, Sorare provides a digital collectibles platform based on the Ethereum blockchain. With non-fungible tokens, the platform offers a collective fantasy football experience allowing players to manage their players and earn prizes.

Gerard Piqué, strategic advisor at Sorare, explained that the platform aims to meet the significant shift to online and digital fan experiences:

“As world football has shifted from local supporters to global fanbases, football fans are looking for new ways to be connected to the game, the players and other fans.”

Blockchain and cryptocurrency startups have been actively tapping the soccer industry in order to bring new ways of fan engagement using emerging technologies. Socios and Chiliz represent some of the best-known industry efforts, jointly providing blockchain fan tokens for popular global soccer clubs like FC Barcelona, Juventus and Paris Saint-Germain. Earlier this week, Polish Legia Warsaw became the latest soccer club to join Chiliz and Socios.

Source: https://cointelegraph.com/news/blockchain-soccer-gaming-startup-sorare-raises-50m

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