Liguria is an italian harsh, windy region where land is lacking and terracing is necessary to take advantage of every inch.Ligurians are the same: often sharp and ingenious, probably also thanks to good wine plucked from the rocks, and very careful (even too much so) about their wallets.One of the first banks in the world is the “Banco di San Giorgio.”The distant origins of this bank are to be found in the first state loan contracted by the Genoese municipality after the expedition of Almeria and Tortosa in 1147.

Liguria’s son

Paolo Ardoino, the Genoese behind Tether is also a son of his homeland: shy, soft-spoken, but a great capitalizer of resources.Passionate from a young age about information technology and cryptography, he graduated without even a year’s delay in Computer Science in 2008.To sustain himself during his studies, he was already inserted in the working world during university and in 2007 founded his first company: Involutive, with which he created WarWide, a free browser game that he abandoned to its fate five years later.The site is still active, probably because of that typical nerd discomfort at leaving anything behind.Paolo, we feel you!

There’s a new kid in town

After working as a researcher in various military projects where he managed to, among other things, improve his cryptographic skills, he landed in London, where he founded Fincluster in early 2013. This company, too, would be abandoned to its fate after five years but it was during this period that Paolo began to fit into the only-seemingly-quiet Swiss town of Lugano, developing various cloud-based solutions in the financial sphere in various companies in the area, contributing to the blockchain ferment that in 2017 would officially give birth to the “Crypto Valley”Also in Lugano, after scaling Bitfinex from senior developer to CTO, he will move the server infrastructure of this cryptocurrency exchange company in 2018.

I peg you pardon

In 2015, precisely on Bitfinex, peeps timidly Tether, a stablecoin having Bitcoin as layer 1 and launched the year before when it was still called Realcoin.Of course, Paolo becomes CTO here as well in short order.It is funny how a coin founded by Jean Chalopin, creator of Inspector Gadget, and Brock Pierce, the young counterpart of Emilio Estevez in the Disney children’s movie Mighty Ducks, went to a market capitalization of almost 80 billion within 9 years, but so it is.For yes, speaking of stablecoin, it means that as of April 29, 80 billion USDT had actually been minted, which then dropped to 62 because of the continuation of this bear market.

A crash, by any other name, would smell as s**t

Call it whatever you like: CryptoCrash, CryptoWinter…the fact is that, since the Luna collapse, nothing is going straightly.Few expected the Celsius debacle as well, and it’s not much consolation knowing that Sam Bankman-Fried, the likely architect of this blockchain reaction, took himself out with his own hands thanks to a mix of recklessness, greed, and sociopathy (judging by how he’s handling the aftermath on socials).But without revisiting the topic, let us together try to reason about a concept that is often underestimated: while the value of a normal token is given by the market, the one of a stablecoin is only a presumption of value: assuming (and of course not conceding) that each Tether is backed 1-to-1, let’s take a simple-simple-example: in 2021, with my bitcoin worth $50,000 I bought 50,000 USDT.To this day I continue to have 50 thousand USDT, but the Bitcoin I gave is now worth $15 thousand…not to mention the fact that if in the meantime it has been converted into some other token, such as Luna or Ftt, of my initial $50 thousand, nothing is left.

♫ Mint is in the air ♫

There have been a lot of talks these days about Proof of Reserve relative to exchanges, but what is a stablecoin if not a Hard Exchange?How can a stablecoin remain stable in a bear market?The only realistic possibility for this to happen would be to accept only FIAT, or to convert the collateral immediately: this clearly will have to entail a higher conversion cost, which would also include management costs, but still better than advertising a coin having a peg stably at 90 percent of the benchmark FIAT.How can there be a one-to-one match if, in the light of day, 400 million (dollars) Tether at a time are always precisely minted?No other stablecoin, (even fully audited like USDC or USDP) behaves this way.

DoR (Declaration of Reserves) timeline

201709 — “Friedman LLP will audit Tether” — Tether website201712 — “Friedman LLP will NOT audit Tether because the proposed excruciatingly detailed procedure” — Coindesk2018 — “Every Tether is always backed 1-to-1, by traditional currency held in our reserves. So 1 USDT is always equivalent to 1 USD” — Tether website201806 — “The bottom line is that an audit cannot be obtained” — general Tether counsel Stuart Hoegner201902 — “Every Tether is always backed 1-to-1, by traditional currency held in our reserves. So 1 USDT is always equivalent to 1 USD which may include affiliated entities” — Tether website201904 — “Tether is only about 74 percent backed by fiat equivalents” -general Tether counsel Stuart Hoegner201905 — “Tether does not need to hold $1 for every USDT issued” — Tether attorney Zoe Phillips202107 — “Audit? We are likely months away” — Paolo Ardoino202206 — “We are open to provide more information” — Paolo Ardoino202208 — “Our community asked over time to improve the auditing firm that we’re using because they felt like they wanted something bigger, so we hired BDO Italia” — Paolo Ardoino20221126 — “All Tether tokens are pegged at 1-to-1 with a matching fiat currency and are backed 100% by Tether’s reserves” — Tether website

Fines are fine

Tether in 2021 was fined $18 million by New York’s attorney general and $41 million by the U.S. Commodity Futures Trading Commission for “fraudulently declaring” it was fully backed by dollars. All this was after they still went to great lengths to try to slow down the investigation under every possible pretext.In one of the sentences, USDT was called “a stablecoin without stability.”This could have been an opportunity to provide clarity, but instead, no, Paolo and friends preferred to pay a thousandth of everything to maintain this smokescreen. Little, you will say: indeed yes.

An audit Odyssey

The Friedman LLP audit company, rejected by Tether for being too much “slow and deep in the process” has been fined in September $1 million by SEC for being “sloppy,” but nobody cares. A mix of the Ftx and Tether board acquired through subsidiaries a tiny bank in the Bahamas with 3 employees, which didn’t even provide credit cards, pumping it with $11 million but *AGAIN* nobody cares. We are like the Proci in the Odyssey: waiting for 8 years for Penelope to finish weaving the web, goitering and feasting in the meantime, under the illusion that everything will sort itself out…Ulysses was put by Dante in the circle of the slothful, but we are much worse, and above all, we ignore how many years Paolo has been CTO of Tether: hopefully less than five.