Topic: How USDT adjust their price? (Read 157 times)
legendary
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This might be noob but I think they adjust the price from the exchange api, probably there will be one api that controls all the changes where usdt is listed, so this will make it very easy to readjust, my reason for thinking this way is that we all know that usdt is centralized, which means that it's controlled by a group of people, so I believe this is what this group of people are doing, working to keep the price stable against 1 paper dollar.
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There is a risk though since they are gathering the value of USD from an external process, who is in charge? What guarantee that this person is always reliable?
They probably have a whole team for this. There's always that human error factor that's why I don't think they will just rely on one person to handle all of that. As to the guarantee that none of them will mess up, there's none I guess but people will trust that they're highly professional anyway. There is a risk though since they are gathering the value of USD from an external process, who is in charge? What guarantee that this person is always reliable?
I know this kind of USDT coin and this coin is always stable because it always corresponds to the price of the dollar and therefore the USDT coin can be used like a digital dollar. And you can buy this coin on any exchange. This coin can be deposited and stored safely.
I have read the USDT smart contract and there is no price re-adjustment. Only some management functions like blacklist addresses burn cash and of course the basic ERC20 functions.
But how do they re-adjust the price to be 'stable'
Is it done from outside?
Then do they have to do it for each exchange, using the exchange API?
More info is welcome!
Yeah, it's not in their code and probably done from outside using exchange API and then adjusted their price accordingly. They probably do it for security reasons though. It has been expounded here, or something similar that Tether has implemented.But how do they re-adjust the price to be 'stable'
Is it done from outside?
Then do they have to do it for each exchange, using the exchange API?
More info is welcome!
Quote
First, a standard smart contract for an ERC-20 token, Digipound, was written anddeployed to a test Ethereum blockchain. Next, three main functions were createdto implement each of the stages of the issue-trade-redeem cycle of a stablecoin. Inthe issue stage, payments of GBP are accepted using the Stripe platform, triggeringa call to an API that is connected to the Ethereum blockchain, web3, to issue theaforementioned token. Digipound tokens can be traded through both the project orindependently. In the redeem stage, a call to the web3 API writes a transaction toburn the Digipound tokens before calling the Stripe API to issue a payout of the ap-propriate amount of pounds back to the user. These functions were transformed intoa user experience via the Digipound website, which also kept track of the balance ofGBP in a reserve account connected to Stripe as well as a link to a block explorer,a blockchain search engine, to verify the amount of the Digipound tokens that wereissued. These quantities were tracked in real time and displayed in a clear manneron the web application’s landing page, representing the auditing system
https://www.imperial.ac.uk/media/imperial-college/faculty-of-engineering/computing/public/1819-ug-projects/NageswaranS-Design-and-Implement-a-Stablecoin-Cryptocurrency.pdf
You can take a look at how many tokens the company is minting from the treasury and you'll have a basic idea how they do it. I imagine setting up huge sell and buy orders at $1.01 and $0.99 respectively. They probably have a bot linked to each exchanges USDT is listed.
That means that they need to have a bot for each exchange. And now that they have both contracts on the ETH and TRON blockchains that's double the bot job.
There is a risk though since they are gathering the value of USD from an external process, who is in charge? What guarantee that this person is always reliable?
I have read the USDT smart contract and there is no price re-adjustment. Only some management functions like blacklist addresses burn cash and of course the basic ERC20 functions.
But how do they re-adjust the price to be 'stable'
Is it done from outside?
Then do they have to do it for each exchange, using the exchange API?
More info is welcome!
USDT is not volatile as other cryptos and even in Fiat there is no perfect stable value, their value keep swinging in decimals all the time that is what happening with USDT too due to changes in excessive demand and supply the price fell short or high from the actual $1 value. But how do they re-adjust the price to be 'stable'
Is it done from outside?
Then do they have to do it for each exchange, using the exchange API?
More info is welcome!
You can take a look at how many tokens the company is minting from the treasury and you'll have a basic idea how they do it. I imagine setting up huge sell and buy orders at $1.01 and $0.99 respectively. They probably have a bot linked to each exchanges USDT is listed.
I have read the USDT smart contract and there is no price re-adjustment. Only some management functions like blacklist addresses burn cash and of course the basic ERC20 functions.
But how do they re-adjust the price to be 'stable'
Is it done from outside?
Then do they have to do it for each exchange, using the exchange API?
More info is welcome!
It's done from the outside dude, the reserved fund is something that will re-adjust the price and smartcontract plays nothing in this case. People will believe re-adjustment based on the reserved funds rather than the code. Remember that if the code will not be affecting the market but it can only re-adjusting the total supply like rebase toke. But how do they re-adjust the price to be 'stable'
Is it done from outside?
Then do they have to do it for each exchange, using the exchange API?
More info is welcome!
The demand will be helping to re-adjust it based on the reserved fund that owned by the company. You will find nothing about this on the smartcontract.
So the steady price is held by outside backup funds hmm, on average people think that like other asset based projects like gold, silver, diamonds and the like they say that the assets are based on the original backup of the supply of each commodity.
I have read the USDT smart contract and there is no price re-adjustment. Only some management functions like blacklist addresses burn cash and of course the basic ERC20 functions.
But how do they re-adjust the price to be 'stable'
Is it done from outside?
Then do they have to do it for each exchange, using the exchange API?
More info is welcome!
It's done from the outside dude, the reserved fund is something that will re-adjust the price and smartcontract plays nothing in this case. People will believe re-adjustment based on the reserved funds rather than the code. Remember that if the code will not be affecting the market but it can only re-adjusting the total supply like rebase toke. But how do they re-adjust the price to be 'stable'
Is it done from outside?
Then do they have to do it for each exchange, using the exchange API?
More info is welcome!
The demand will be helping to re-adjust it based on the reserved fund that owned by the company. You will find nothing about this on the smartcontract.
I think usdt was based on the fluctuations of dollar rate, and what I see about it's fluctuations is the same with fiat cash value or the stability of this asset. Once fiat value also rises, price for usdt also be affected that's why exchange to different coins would become profitable when acquire more gains in trading.
That is another reason for USDT could maintain its price, the most important thing out of them is its peg or reserve.When someone deposits 1 USDT on exchange wallets, at the same time the exchange credits 1 USD to the user wallet.
Its stability comes from the USD reserve. It is pegged 1:1 to the real USD that is why it could maintain its price(we are not talking about a rumor it does not have enough reserve to back it, we are purely talking about its mechanism).
This true, my country stablecoins work like this too. The point too control the price is to have market makers too in the market to keep the price fluctuations not too high. Also, if the price too down like 1%, many trader would take that as opportunity because you can withdraw that stablecoins into fiat 1:1, otherwise if the price too high people will deposit their fiat and change it to stablecoins then sell it on the market.
I think usdt was based on the fluctuations of dollar rate, and what I see about it's fluctuations is the same with fiat cash value or the stability of this asset. Once fiat value also rises, price for usdt also be affected that's why exchange to different coins would become profitable when acquire more gains in trading.
That is another reason for USDT could maintain its price, the most important thing out of them is its peg or reserve.When someone deposits 1 USDT on exchange wallets, at the same time the exchange credits 1 USD to the user wallet.
Its stability comes from the USD reserve. It is pegged 1:1 to the real USD that is why it could maintain its price(we are not talking about a rumor it does not have enough reserve to back it, we are purely talking about its mechanism).
I have read the USDT smart contract and there is no price re-adjustment. Only some management functions like blacklist addresses burn cash and of course the basic ERC20 functions.
But how do they re-adjust the price to be 'stable'
Is it done from outside?
Then do they have to do it for each exchange, using the exchange API?
More info is welcome!
But how do they re-adjust the price to be 'stable'
Is it done from outside?
Then do they have to do it for each exchange, using the exchange API?
More info is welcome!
I think usdt was based on the fluctuations of dollar rate, and what I see about it's fluctuations is the same with fiat cash value or the stability of this asset. Once fiat value also rises, price for usdt also be affected that's why exchange to different coins would become profitable when acquire more gains in trading.
I understand but how they are doing it programatically? I do not see the code in the smart contract.
I have read the USDT smart contract and there is no price re-adjustment. Only some management functions like blacklist addresses burn cash and of course the basic ERC20 functions.
But how do they re-adjust the price to be 'stable'
Is it done from outside?
Then do they have to do it for each exchange, using the exchange API?
More info is welcome!
But how do they re-adjust the price to be 'stable'
Is it done from outside?
Then do they have to do it for each exchange, using the exchange API?
More info is welcome!
I think usdt was based on the fluctuations of dollar rate, and what I see about it's fluctuations is the same with fiat cash value or the stability of this asset. Once fiat value also rises, price for usdt also be affected that's why exchange to different coins would become profitable when acquire more gains in trading.
I have read the USDT smart contract and there is no price re-adjustment. Only some management functions like blacklist addresses burn cash and of course the basic ERC20 functions.
But how do they re-adjust the price to be 'stable'
Is it done from outside?
Then do they have to do it for each exchange, using the exchange API?
More info is welcome!
But how do they re-adjust the price to be 'stable'
Is it done from outside?
Then do they have to do it for each exchange, using the exchange API?
More info is welcome!
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