There's very little about who actually has custody of the paid-in money and what guarantees it gets paid out if "stablecoin" outflow exceeds inflow. The "smart contract" machinery doesn't really do much about that part.
Tether has been vague about that, too. Tether has been trading at a discount to the dollar, lately about 3-5%.[1]
The usual failure mode is that whoever has custody of the money starts investing it. They don't have to pay the profits to the coin holders. Then they start making risky investments. Then they lose money. Then they start faking it. In the real brokerage world, they go to jail for speculating with customer funds.
Here's the website: https://www.centre.io/usdc
Here's the whitepaper: https://www.centre.io/pdfs/centre-whitepaper.pdf
There's very little about who actually has custody of the paid-in money and what guarantees it gets paid out if "stablecoin" outflow exceeds inflow. The "smart contract" machinery doesn't really do much about that part.
Tether has been vague about that, too. Tether has been trading at a discount to the dollar, lately about 3-5%.[1]
The usual failure mode is that whoever has custody of the money starts investing it. They don't have to pay the profits to the coin holders. Then they start making risky investments. Then they lose money. Then they start faking it. In the real brokerage world, they go to jail for speculating with customer funds.
[1] https://cryptocoincharts.info/pair/usdt/usd/kraken/1-month