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just saw this, LOL. Fantastic.
My homie Matt Levine commented:
For 22 minutes yesterday, Paxos was just holding $300 trillion of assets that it had created out of thin air by accident. The price of PYUSD did not budge, varying between $0.9995 and $1.00015 while this was happening. Presumably if Paxos had announced “hey we created $300 trillion of naked PYUSD, want some?” then the price would have collapsed: The 2.6 billion actually existing PYUSD are worth a dollar each because they are backed by $2.6 billion of dollar assets; 300.0026 trillion PYUSD backed by $2.6 billion would be worth considerably less. But by the time anyone cared it was fixed.
Had a good laugh at this, alrightsy @Undisciplined
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So, what happens when one of these actors does this on purpose and actually spends it into the global economy?
How transparent are the proofs of reserves and claimed assets?
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the peg breaks, and the "price" of that stablecoin goes to zero...?
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The peg breaks when people become aware of the situation, but isn't monetary history full of people getting away with overissuance for pretty long periods of time?
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