Diversification Can Protect Against the Unexpected

Jskda Jskdas
انضم: 2022-09-24 15:20:00
2023-08-04 19:28:54

Exploring Stablecoin Risk Management and Diversification

The collapse of Terra in 2022, the fall of Silicon Valley Bank earlier this year, and the accompanying USDC depegging event have raised critical questions about stablecoins and associated risks. How can investors diversify their stablecoin holdings to mitigate counterparty risk, what types of infrastructure solutions for stablecoin redemption and creation are required to satisfy extreme volumes?

Claire Ching, Gemini’s Head of Institutional, and Kevin Yedid-Botton, Partner at ParaFi Capital, dove into these questions and more during a recent Gemini Webinar.

They explored stablecoin risk management, discussed web 3.0 why stablecoin diversification is critical for players in the crypto space, and demystified the range of components underlying these types of crypto tokens, ultimately shedding light on the dynamic stablecoin landscape.

Below, we tease out three salient takeaways from the conversation between Claire and Kevin.

Diversification Can Protect Against the Unexpected

Despite the variety of dollar-based stablecoins, including Gemini dollar (GUSD), USD Coin (USDC), and Tether (USDT), diversification is central to a sound stablecoin portfolio. A main differentiator between dollar-based stablecoins is their reserve backing composition, with treasury management teams for each issuer using varied approaches to ensure the token’s 1-to-1 backing.

To highlight the importance of diversification, Claire and Kevin discussed an example from June when the U.S. government was edging closer to its debt ceiling, and was struggling to get the votes in Congress to raise it. Some stablecoin issuers hold a large amount of their reserves in short-term U.S. treasuries. With the looming risk of U.S. debt default, these issuers made adjustments to their collateral reserve strategy in an effort to mitigate any potential fallout.

Circle, the company behind USDC, publicly shifted a large portion of its stablecoin reserves away from those short-term treasuries into overnight repurchase agreements (another type of short-term loan used by treasury traders).

Gemini took a different approach to backing GUSD, known as a barbell approach. We adjusted our treasury holdings to avoid maturity dates during the period that a potential government default could occur (with most treasuries maturing before and after that period, hence “barbell"), reducing exposure to the debt ceiling standoff.

Overall, Tether has a separate strategy. While it holds a large portion of its USDT reserves in treasuries, it also includes allocations to precious metals, bitcoin, secured loans, and other investments.

The chart below outlines where these different stablecoin issuers hold their reserves, how they responded to the debt ceiling crisis, and what their reserves looked like as of May 31, 2023 (GUSD and USDC) or as of March 31, 2023 (USDT).

Ensuring Seamless and Reliable Creation and Redemption

Ultimately, the seamless creation and redemption of stablecoins should be the primary concern for any stablecoin issuer. Some issuers do that better than others. GUSD, for example, can be created and redeemed on Gemini in a few steps, all you need is a Gemini account. Similarly, USDC, can be created and redeemed through Coinbase and Circle.

In the case of USDT, the average person lacks direct access to the creation or redemptions levers. Instead, they are reliant on the secondary market, which can lead to significant swings in the value of USDT (not preferable given that these tokens are meant to remain “stable”).

Jaimeco Meco
انضم: 2022-08-30 10:01:00
2023-10-19 10:22:48
Today there are many different types of business promotion, and they are all good in their own way.
 In order for advertising to bring a greater effect, you need to properly negotiate with advertisers, 
in order to be able to properly negotiate, I advise you to take Webinars on Negotiation Skills https://hrdqu.com/events-negotiation/, 
there you will gain the skill and become an experienced business promotion manager. Having experience
in successful business projects, you can get a job in any large company
Ameen Ansari
انضم: 2023-12-25 16:49:15
2024-01-11 15:45:34

One thing is that if you find yourself searching for a student loan you may find that you’ll want a co-signer. There are many circumstances where this is correct because you will find that you do not use a past history of credit so the mortgage lender will require that you’ve got someone cosign the borrowed funds for you. Good post. 프리카지노

Ghmghkghk Yujkyukoyu
انضم: 2023-11-13 12:15:26
2024-01-11 16:35:49

An intriguing discussion will probably be worth comment. There’s no doubt that that you simply write regarding this topic, it will not certainly be a taboo subject but usually consumers are not enough to communicate on such topics. An additional. Cheers 더킹플러스카지노

Ghmghkghk Yujkyukoyu
انضم: 2023-11-13 12:15:26
2024-01-18 15:10:11

the shoulder bags that my girlfriend uses are always made up from natural leather` Exotic Rice method

Ameen Ansari
انضم: 2023-12-25 16:49:15
2024-01-20 16:45:20

When I originally commented I clicked the -Notify me when new comments are added- checkbox and now every time a comment is added I get four emails with the same comment. Is there any way you’ll be able to eliminate me from that service? Thanks! 91 Club

Fagof3 Fagof3
انضم: 2023-12-25 12:56:52
2024-01-21 12:52:28

Hey there! Someone in my Facebook group shared this site with us so I came to look it over. I’m definitely enjoying the information. I’m book-marking and will be tweeting this to my followers! Outstanding blog and amazing style and design. เบทฟิก68

Ameen Ansari
انضم: 2023-12-25 16:49:15
2024-01-27 09:44:59

Hmm is anyone else experiencing problems with the images on this blog loading? I’m trying to find out if its a problem on my end or if it’s the blog. Any feed-back would be greatly appreciated. د سعودي عربستان د سیاحت ویزه

Yeboxe6042 Yeboxe6042
انضم: 2024-01-04 07:25:38
2024-01-27 13:08:31

It’s rare knowledgeable men and women with this topic, however, you seem like do you know what you’re speaking about! Thanksslot700

Ghmghkghk Yujkyukoyu
انضم: 2023-11-13 12:15:26
2024-01-28 13:22:06

bathroom towels should be maintained with a good fabric conditioner so that they will last longer. Soi cầu

Ameen Ansari
انضم: 2023-12-25 16:49:15
2024-01-29 15:31:40

I adore your blog site.. excellent colors & motif. Would you actually layout this excellent website on your own and also performed people rely on someone else to get it done for you? Plz react while I!|m planning to design and style my own blog site in addition to wish to find out where by you became this by. many thanks tải app Hi88​​

Ghmghkghk Yujkyukoyu
انضم: 2023-11-13 12:15:26
2024-01-29 16:40:58

Can I just say what a reduction to find somebody who really is aware of what theyre speaking about on the internet. You undoubtedly know learn how to bring a problem to gentle and make it important. More people have to learn this and perceive this aspect of the story. I cant believe youre not more in style since you positively have the gift. https://zbet.events/

Fagof3 Fagof3
انضم: 2023-12-25 12:56:52
2024-01-30 11:34:19

Excellent read. I just passed this onto a friend who was doing a little research on that. He just bought me lunch as I found it for him! So let me rephrase: Thanx for lunch!  bosswd

Ghmghkghk Yujkyukoyu
انضم: 2023-11-13 12:15:26
2024-01-31 16:36:04

Isn’t it entertaining if we always talk about topics like that.~`’-*먹튀사이트

Tenere Hamza
انضم: 2022-12-15 16:06:11
2024-02-03 10:17:45

I favor a upload. It is really great to understand individuals explain in words through the soul and even level of quality because of this significant theme may perhaps be without difficulty noticed. a course in miracles

Anus Hamid
انضم: 2023-11-08 14:26:24
2024-02-03 10:46:49

faith. I don?t know if finest practices have emerged round issues like that, but I’m sure that your job is clearly recognized as a good game. Each boys and  0123win​​

Yeboxe6042 Yeboxe6042
انضم: 2024-01-04 07:25:38
2024-02-04 09:28:35

If this new football wants to succeed and grow a loyal following fast, they should follow the blueprint that has worked well for “sports” like golf, auto racing, and boxing, all of which have enjoyed recent swells in popularity. Here is what they did:안전놀이터

John Harwward
انضم: 2023-11-09 12:24:52
2024-02-04 12:03:50

Aw, this has been a very nice post. In thought I must devote writing this way additionally – taking time and actual effort to create a excellent article… but exactly what can I say… I procrastinate alot and by no indicates appear to go accomplished. ہندوستانی ویزا درخواست

Yeboxe6042 Yeboxe6042
انضم: 2024-01-04 07:25:38
2024-02-04 14:13:39

This is the proper weblog for anyone who wishes to be familiar with this topic. You know a whole lot its practically challenging to argue on hand (not that When i would want…HaHa). You definitely put a brand new spin on the topic thats been discussing for several years. Great stuff, just wonderful!iwin ios

Yeboxe6042 Yeboxe6042
انضم: 2024-01-04 07:25:38
2024-02-05 05:48:32

There are a few interesting points soon enough in the following paragraphs but I don’t determine if I see these people center to heart. There is some validity but I’m going to take hold opinion until I consider it further. Great write-up , thanks and now we want far more! Added to FeedBurner at the same timeBetting utan svensk licens

Yeboxe6042 Yeboxe6042
انضم: 2024-01-04 07:25:38
2024-02-06 10:22:50

Many thanks for making the effort to discuss this, I feel strongly about this and enjoy studying a great deal more on this matter. If possible, as you gain expertise, would you mind updating your webpage with a great deal more details? It’s extremely beneficial for me.fire kirin login