/biz/ - Business & Finance

>>53413172
Par value is customer liabilities, meaning total minted USDC. Highly improbable to ever recover from a drop below that, the reason is that redemptions increase when an institution is unfunded. It's the classic run on the bank scenario. If the speculative collateral is positive yielding and highly liquid then all is fine but if they've lost money on it then that means that they're undercollateralized at the same time that redemptions are increasing. Being undercollateralized in a stablecoin is fatal, these are the money markets of crypto currency. A 3% loss in collateral, no matter how temporary, is more than enough to kill them.