Quote:
Originally Posted by donk.
And yet for some reason, there's a good chunk of men that like it
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The idea of pegging means that it's inferior to begin with, only by linking itself to something that's better and more stable can it create value.
Which brings the question, why not just buy that something it's pegging with?
UST was mainly backed by 10B worth of BTC. And since there's no limit how little BTC you can trade, why not just buy BTC?
"Pegging" gives a false illusion that it's secure, that many felt for it because they wanted to get into crypto but think it's too volatile. That's the original intention of "pegging", to create the illusion of security for new crypto investors. Nothing more, nothing less.
The USD doesn't peg to anything. The Gold doesn't peg to anything. But they have no problem retaining their relative value. I've lived through a country where they tried to "peg" to USD, and I will never again trust that idea. Because as I said... why not just buy that thing it's pegged to?