Oddbean new post about login | logout How its done: financial engineering. Benefit: “stable” value in synthetic USD. This is important for a subset of customers who cannot afford to assume the short term volatility downside.
And what does financial engineering mean? 😏
“To create the synthetic USD, Stablesats uses a financial instrument invented by the BitMEX cryptocurrency exchange called a perpetual inverse swap using perpetual futures contracts. Futures contracts are a type of agreement to buy or sell a specific asset (such as bitcoin) at a set future date for a set price. Perpetual futures contracts differ in that they are perpetual and don’t specify a future date.” Example
That still doesn’t make sense. How does selling bitcoin at a future date at a set price stabilize your synthetic USD?
sounds like “printer go brrrrrr”
Backed by Bitcoin.. we do it in the right way...!
I’m not saying this is not legit, but I don’t understand the stabilization mechanism. Would love to see a plain English explanation without financial speak gobbledygook obfuscation.
100%. Lots of people cannot and do not use sats because they are not rich enough like Saylor to Hodl forever. they need the money in weeks or months time. So stabilizing the sats and not using anything like USDT or treasuries greatly reduces risk.