A Noteworthy Involvement of Alameda Research in Tether (USDT) Minting
A recent disclosure by Conor Grogan, Director at Coinbase, unveiled the significant involvement of Alameda Research in the minting of Tether (USDT) tokens. Through meticulous on-chain data analysis, it was found that Alameda was responsible for minting a massive $39.55 billion of USDT, representing approximately 47% of Tether’s circulating supply as of October 10, 2023. Grogan updated previous estimates by identifying additional wallets associated with the minting process.
Alameda’s Asset Management and USDT Minting
It was further revealed that the amount of minted USDT exceeded Alameda’s assets under management (AUM) at the pinnacle of the cryptocurrency market. This implies a significant role played by Alameda in the USDT market, contributing vastly to the stablecoin’s circulating supply.
Redemptions and Offchain Coordination
The process of accurately determining redemptions remains challenging due to Tether’s offchain coordination of burns. Entities send funds directly to the treasury for redemptions as Tether lacks deposit addresses. Grogan speculated that assuming all USDT redemptions from FTX were from Alameda, they would have redeemed $3.9 billion USDT, with most occurring during an event called the Luna implosion.
Public Reactions and Further Inquiries
The public’s reaction to these findings was mixed, with some questioning the veracity of deposits to Tether’s bank account compared to the minted USDT. Others raised concerns about Grogan’s methodology, but he defended it by citing various sources including public information and court filings related to FTX and Alameda accounts.
Insights from 2021 by Alameda’s Former CEO
In a discourse from 2021, Sam Trabucco, the former CEO and crypto quant trader at Alameda Research, discussed USDT’s trading dynamics. He explained the volatility of USDT’s premium over other stablecoins like USDC, attributing it to the complex creation and redemption process for USDT. Trabucco also highlighted how firms like Alameda could leverage price deviations to align USDT’s price closer to $1.
The significant quantity of USDT minted by Alameda Research highlights the close relationship between large crypto trading firms and stablecoin operations. Grogan’s findings shed light on the intricate dynamics of USDT’s minting and redemption processes, revealing the mechanisms that help maintain the stablecoin’s peg to the US dollar.
Hot Take: Alameda Research Plays a Pivotal Role in Tether Minting
The involvement of Alameda Research in minting a substantial portion of Tether (USDT) tokens underscores their significance in the stablecoin market. With meticulous data analysis, Conor Grogan uncovered that Alameda was responsible for minting around 47% of Tether’s circulating supply. This revelation raises questions about the relationship between large crypto trading firms and stablecoin operations, as well as the impact on maintaining the stability of USDT’s peg to the US dollar.
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