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A Bridge Called Tether

A parable of risk assessment.

CoinDesk Insights
Apr 23, 2021 at 6:13 p.m. UTC
Updated Sep 14, 2021 at 12:46 p.m. UTC

Once upon a time, there was a bridge strung between two mountaintops. It was made of rope and wooden boards and creaked and wobbled in the wind, but every day the mountain people used it to cross the yawning chasm. They called it Tether.

“It could snap any time!” cawed the crows that regularly circled above their heads. While the people dismissed these shrill creatures as a nuisance, deep down many of them harbored a tinge of doubt. Yet, they continued to cross the bridge back and forth, often several times a day.

This article is excerpted from The Node, CoinDesk's daily roundup of the most pivotal stories in blockchain and crypto news. You can subscribe to get the full newsletter here

It was the most convenient way to get from one peak to the other. Alternatively, they could hike down one mountain, cross the Valley of the Banks and climb the other, but that would take days. Crossing the bridge took an hour at most. It was not simply a matter of impatience; the people made their living by trading with their neighbors on the other mountain, and by the time they had completed the journey through the valley a trade opportunity might be gone.

Besides, nobody lived on the bridge. It was only used to travel from point A to point B. If lives were at risk, as the annoying birds kept warning, it was only for brief periods of time. The bridge had been there for years. It might not be there forever, but who was to say it would collapse on a given day?

Over time, new bridges between the mountains were constructed parallel to the Tether bridge. These bridges were, by all appearances, far sturdier, made of steel and vouched for by the most respected engineers in the land. Meanwhile, the keepers of the Tether bridge struggled to find an engineer willing to even inspect it (until one day one came from a beautiful island far, far away).

Some of the mountain traders started crossing these new spans, known as USDC, GUSD and PAX. But the majority of them kept using Tether.

It turned out the proprietors of the new bridges stopped travelers at the edges, made them sign a journey book and searched all their pockets. “It is the law of the land,” the bridge keepers would say. “We cannot allow our bridges to be used by thieves or riffraff.” Occasionally, the bridge keepers would throw someone off their bridges mid-crossing, explaining they were ordered by the king of the valley.

By contrast, the keepers of the Tether bridge historically gave their patrons just a cursory pat-down at entry and exit (though they did get stricter over time and threw at least* one suspected thief into the abyss). For most of the mountain people, the nerve-racking experience of crossing the old bridge was preferable to the indignities required to use the new ones.

One day, an old mountain man who had managed to strike it rich in the valley constructed another, most unusual span. This one was perpendicular to the USDC and Tether bridges, connecting them.

Some of the mountain people took this as a sign the crows had been wrong all along. The man, after all, was respected among the engineers who inspected bridges, and the king had allowed him to amass his fortune. So if he was willing to have anything to do with Tether, maybe it was here to stay.

Even the white-knuckled travelers felt a bit relieved. Now, on an especially windy day, they would have the option of switching bridges during a trip.

*Archaeologists would later find evidence of nearly 400 such incidents.

UPDATE (04/26, 01:37 UTC): Added a link to the seventh paragraph, an asterisk to the eighth paragraph and a footnote at the bottom.

DISCLOSURE

The leader in news and information on cryptocurrency, digital assets and the future of money, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

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