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Noticing the collaborative relationship between USDM and USDE, this design is quite interesting. From what I understand so far, USDM is unlikely to open a direct redemption channel, but will mainly rely on the Secondary Market for circulation and trading.
This mechanism design is actually not uncommon in the stablecoin field – by restricting redemption to control liquidity risk, trading demand is directed to the Secondary Market. For holders, it means that exiting relies on market depth and liquidity, rather than direct redemption.
If this is the case, then the roles of liquidity providers and market makers become especially important. The price anchoring ability and trading depth of the Secondary Market will directly affect the actual availability of USDM.
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To be honest, I've seen this trap many times; in the end, it all crashes when the liquidity dries up.
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Market makers really became daddies; now it all depends on whether they are in a good mood or not.
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Restricting redemption sounds risky; what if there’s a panic?
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Relying on secondary market liquidity to support the price feels quite risky.
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Isn't this just a disguised liquidity trap?
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What kind of tricks is USDE pulling, making it so complicated?
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The price anchoring all depends on LP's mood; I'm not very confident.
Can't redeem directly? Then how can I believe this thing is really worth 1 dollar...
When the Depth of the Secondary Market is insufficient, it collapses so quickly, I've seen this trick too many times with Luna.
Market makers profit from the spread, while we act as dumb buyers, a classic case.
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To put it bluntly, it’s still a bet that the secondary market won't crash, with the risk transferred to the market makers.
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Is there any difference between this operation of USDM and those before? It feels like the same old trick.
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Liquidity providers have now become the most critical role; this business is not easy to do.
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I'm a bit worried about slippage disasters when there aren't enough trading pairs.
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Thinking calmly, not allowing direct redemptions is actually quite smart, but it does compromise user experience.
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This operation is not very friendly to small holders; they have to wait in line for liquidity to exit.
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It seems that USDM is betting that LPs will continuously provide depth, otherwise it could easily become a zombie coin.