What are /r/Tether's favorite Products & Services?

From 3.5 billion Reddit comments

The funny thing is, someone just posted something about it:

CoinEx.com introduces USDT Credit Default Swap Contract, in case you want to hedge against a collapse in USD Tether.

When you spend 1 BTC to create a USC 0430 contract, you’ll get 1 USCA contract and 1 USCB contract at the same time both of which can be traded in BTC market. Or you can convert back to 1 BTC with 1 USCA contract and 1 USCB contract. When the contract is due and delivered at 24:00 April 30th 2018 (UTC), against the USDT/USD price e.g. 0.95, a USCA holder will get 0.95 BTC from a USC 0430 contract and USCB holder gets the rest.

If you believe there’s a default risk, you can choose to buy USCB contracts. When a default happens leading to a drop of USDT/USD price e.g. to USDT/USD=0.4, a USCB contract will get 1-USDT/USD=0.6 BTC.

If you don’t believe there’s a default risk, you can choose to hold USCA contracts and sell USCB contracts. If no default happens, meaning USDT/USD=1, each USCA contract will bring you 1 BTC and the amount you get from selling USCB is the extra profit.

https://www.coinex.com/cds

For those who want to hedge against a potential collapse in USD Tether.

I quoted from another thread, author: normal_rc

I don't understand why no one is paying this any attention. If you look at the prices on exchanges, they are inflated due to the tether losing its value quickly. Here we see is now .928 cents to 1 USD and falling quickly. How will this affect the markets if it continues to fall?

So after a bit of googling, I've discovered what I was trying to describe above is called a "Bank Run".

https://en.wikipedia.org/wiki/Bank_run

The following is Krakens Financial Security Practice.

"We maintain full reserves — a "bank run" is an impossibility. Customer funds reside in a bank account separate from our operations account, and fees are transferred on a daily basis.

Customer funds cannot be borrowed to fund operations, nor can they be lent, even for margin trading on our own platform.

We have solid relations with our bank, and an agreement is in place allowing us to wind down our account in an orderly fashion, should our relationship ever come to an end.

We are pursuing multiple banking partnerships to build in some financial redundancy — so that even should the above situation come to pass, our daily operations will not be interrupted."

https://www.kraken.com/security/practices

So theoretically I'm safe, right? or am I missing something?

Interesting. Indeed there is no specific risk for Kraken (as far as I understand), since if nobody is there to buy them, the price will crash, but the crash should not directly affect the rest of the exchange.

Note: A peculiarity of the USDT/USD pair is that it is the only one for which Kraken does not take fees for volume >1M https://www.kraken.com/help/fees