USDT price has fallen, exposing the fatal weakness of the token economy

The USDT price has fallen.

The USDT issuer Tether promises that each USDT pass will correspond to a $1 reserve.

In theory, users can exchange one USDT for Tether for $1.

This "Gold standard" system guarantees a price equal to $1 per USDT.

But recently, USDT's price volatility has triggered a panic selling, causing its price to dive.

The continuous negative news makes this the most successful asset-to-token project no longer trusted by investors.

The crisis of USD has exposed the fatal shortcomings of the current blockchain industry asset certification – it is impossible to tell whether the assets on the chain are real.

The foundation of asset-to-token: digital identity

There is a view that the token is greater than the blockchain.

The founder of CSDN, Meng Yan, defines token as a circulated encrypted digital rights certificate, which makes assets become digital certificates and can be transferred more efficiently. The blockchain is the infrastructure to achieve this goal.

Once, USDT was the most successful case of asset-to-token. To some extent, what USDT does is more meaningful than projects such as Ethereum.

The 1USDT price is always anchored at $1. A user purchasing 1USDT is equivalent to purchasing a $1 equity.

It means that users can freely choose and use the sovereign currency of other countries, so that sovereign currency can compete freely, and the weak purchasing power will be eliminated naturally.

The USDT is a window through which we can see the future of asset-to-token.

But it seems that some power has closed this window. The asset-to-token project was once again in the dark, and development was in trouble.

First, the project party cannot tell if the assets on the chain are true. In fact, because the information is opaque, we can't tell if Tether really has a reserve for the issued USDT.

In addition, how is the winding asset priced? How is Token destroyed if the asset is damaged? How to manage assets, how to redeem them, etc., these problems hinder the development of asset-to-token.

The reason is that there is no way to fully digitize physical assets, so that everything has its own digital asset certificate.

For example, we can't use a string of numbers to represent a bottle of cola, and we can't even sense whether the bottle of cola is leaking or drinking.

The Internet of Things and artificial intelligence will be the basis for the digitization of physical assets, but it is not currently possible.

If all things have their own digital identity on a certain day, just as each of us corresponds to a string of ID numbers, each merchant account corresponds to the QR code, and the asset-to-token era will come true.

STO may become the start of asset-to-token

Although the digitization of physical assets requires IoT technology, this does not mean that assets cannot be chained at present.

Not long ago, the New York Financial Services Authority (NYDFS) approved the release of stable currency GUSD and PAX.

Like the USDT, there is a corresponding US dollar reserve behind the GUSD and PAX, making one token equivalent to one dollar.

The difference is that GUSD and PAX use the existing financial asset supervision system to conduct regulatory review of reserve assets, which is a token issued under legal compliance regulations.

This type of token is called STO (Security Token).

After a few years, perhaps STO will become one of the greatest financial inventions of mankind.

From the current point of view, STO will encourage blockchain startups to raise funds in dollars, issuing tokens in the form of acquisitions or creation of dollar assets.

In addition, users around the world are free to exchange US dollar assets for their own assets.

In the long run, a securities token is the beginning of a currency re-anchoring value.

In fact, there is currently no clear value anchoring for legal tender issuance.

During the financial crisis, the Fed “marked money” and saved Fannie Mae and Freddie Mac, causing the US dollar to be over-issued. But US trading partners with good savings habits have suffered the cost of a dollar depreciation.

The securitization of assets and the issuance of tokens that can be transferred can make the purchasing power of money reflect the demand for real assets. People's preference for assets will affect the price of the currency, which is what Hayek described as "Denationalization of Money."

In contrast, the Fed and other institutions will also change from "athletes" to "referees."

Recently, it is reported that the Nasdaq exchange is planning to launch a unified securities platform to tokenize securities.

At present, we are still unable to give physical assets digital identity and put it on the chain, but we can make brave attempts in the field of digital finance.

As Meng Yan said in his dialogue on the Yuandao, "After fifty or one hundred years, look back today. The Internet of Things may be just a small episode before the arrival of a new civilization, a period of construction of a new world's social infrastructure, but The important thing is the blockchain."