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RE: I think I'm starting to 'get' Bitshares - bitCNY market cap grows a lot - China moving to DEXes??
I did recently read about the BTS backing bitUSD. It is a much better idea than tether because it is backed by a smart contract holding the BTS. I’m definitely going to keep it in mind as an option next time there is a flight to safety needed.
It is a good idea as long as the asset it is pegged to remains stable!
I did some reading up and apparently they have had other assets which were pegged (for example to precious metals) and if one of those dips more than 50% then the BTS backing it will be insufficient to cover it. But this is very unlikely to happen to the dollar of course
I think the backing contract gets cancelled if the the backing currency dips 50%. The backer then gets their BTS back. Someone then needs to fund a new contract with $2 worth of BTS.