Hacker News Reader

Comment by echelon | Hacker News Reader

The creators of USDC could destroy their own coins to restore the 1:1 reserve peg. I doubt they'd do it, but it would immediately restore confidence.

Send them to a null address or commit to burning them in software. If they can restore the reserve, they could remint them.

I'm a crypto bear (with modest crypto holdings for diversification), and I think this is an opportunity for these folks to step up to the plate and show they can meet these sorts of challenges. If you can successfully navigate a bank collapse, then maybe you deserve a seat at the table. I'm not holding out my hopes for USDC though.

View on HN

IMHO, they are justifiably confident that this will all blow over in a few days, and that their deposits will be available to them soon after, albeit with a few percent missing.

But I concur - they are showing their true colors by not defending the peg.

it's not their job to defend the peg on the open market (not to mention impossible by definition), their only product is the possibility to redeem each USDC for $1 through a circle account. We will see on Monday if they can deliver.

Sure, it’s not technically “their job” to destroy a dollar’s worth of obligations for 90 cents. It’s just a darn good idea.

I’m not sure I follow. Circle don’t hold tens of billions of USDC: USDC is minted when they receive USD at a one-to-one ratio. What coins are you proposing they burn? If there’s $10bn USD missing they’d need to burn $10bn USDC.

> The creators of USDC could destroy their own coins to restore the 1:1 reserve peg. I doubt they'd do it, but it would immediately restore confidence.

Why should they? USDC is not an algorithmic stablecoin. For once, it's actually not a failure in crypto that lead to this depeg.

I'm not even sure they are allowed to do it by their own contracts with their clients as long as it is not clear that the USD at SBV is really lost.

> The creators of USDC could destroy their own coins to restore the 1:1 reserve peg.

This is already what happens with redemptions, which as per OP should resume on Monday.

> Send them to a null address or commit to burning them in software.

This only has effect for coins with a fixed supply or at least of fixed schedule of supply.

It's kind of meaningless for them to destroy it, when they can just mint more anyway.

Reply on news.ycombinator.com