/biz/ - Business & Finance

>>52346336
What do you mean by arbitrage here? If it isn't literally 100% guaranteed, then it's by definition not arbitrage. Or am I missing something?

I'd let her depeg me ifyanomsayin

>>52346336
Say you have tether on both binace and kraken.

Price on binance is still $1
Price on kraken is $0.9

Sell 1 usdt on biance and buy 1usdt on kraken. You sold 1usdt for $1 and bought it back for 90 cents.

Transfer to binance (or wait for Price to go back to $1 on kraken) and sell it and you have made 10 cents.

>How to Short Tether on DeFi (Aave v2):

Shorting USDT is basically borrow USDT that you don’t own, with the collateral of other coins you own, then you anticipate the collapse of USDT so that you can buy it back later at significant lower cost and repay what you’ve borrowed and keep the rest as profit.

Here is the simple idea and step by step with Aave v2, but if you understand it you can do it on other platform such as Compound:
-Deposit your collateral coin, this could be ETH, USDC or anything else.
-Borrow as much USDT as possible
-Swap USDT into your collateral coin
-Deposit the swapped coin as collateral again
-Borrow more USDT
-Repeat as much as possible, but keep a buffer between liquidation and current debt-to-collateral ratio.

If you take a look at Defipulse.com there’s a few platform you can short (borrow) USDT

>Dapp for CDP management:

There’s some dapp that helps us manage our collateralized debt position, and the more popular one such as InstaDapp and DefiSaver. Through the use of proxy contract they offer us the feature of deposit collateral and borrow USDT in one single transaction. Which help us save on gas fee.

Both of them also offer simulation with 100 ETH balance, which let you play around with their feature before putting your money into it. I highly suggest trying out their simulation so you can avoid mistake when using actual money. In simulation you don’t have to sign any transaction with your wallet.

>Example of shorting USDT with InstaDapp simulation on Aave v2:
https://www.youtube.com/watch?v=EL7niWJYkEc

>>52347271
That's not arbitrage
>>52346720
That's arbitrage but why would anyone want to do that with a stable rather than literally anything else where opportunities for arbitrage are much bigger, I don't know

>>52347313
Suppose you decide to short tether at 1 USD for 1 million USD. Tether goes to 90 cents. You close your short and buy back so much tether. You have now made 100k minus fees.

Suppose you do this and it goes to zero. It costs basically nothing. You just made a ton of money.

You are correct that it make sense to do this on volatile assets but these can always go whatever way you are not expecting and get liquidated.

Shorting tether has very little downside risk with huge upside risk if it implodes. However you can go back to tether and exchange 1 USDT for 1 USD at size. So basically anyone shorting tether believes it will blow up or is just pissing in the wind because people will just buy up your dumped USDT.

>>52347479
Unless you are a tether truther you are just lighting money on fire. There basically no reason because everyone will just buy up tether below peg, run to tether and redeem.

Tether redeemed billions since may. I mean at a certain point people are just pissing in the wind.

>>52347479
>Tether goes to 90 cents
It doesn't deviate this much, it won't move more than 2% even at most violent times. Enjoy holding that short for your once a quarter 2 cents on the dollar trade minus commission
>but what if it implodes
Surely you can think of stables more likely to implode than tether. MIM comes to mind

>>52347537
>>52347479
>arguing with yourself

>>52347542
>>52347558

It's an example and I'm clarifying but you're asking why people keep shorting it, people think tether isn't backed 1:1 because....it just isn't ok

>>52346336
Take some collateral, deposit into lending protocol
borrow a stablecoin other than USDT, i.e. DAI, USDC
go to curve, swap it for USDT
wait for peg to return
swap the USDT back into whatever you borrowed
pay off debt
???
profit

>>52346336
Challenge accepted.

>>52346336
>depegging
Holy shit bros. Rather than USDT being pegged I want to be pegged by Tifa