Today I saw a screenshot a friend forwarded—on-chain large transfers were being hyped by all kinds of influencers as “smart money positioning early.” Honestly, that kind of interpretation is pretty boring. If you really want to read the “signal direction,” it’s better to keep an eye on the on-chain buy-and-sell order books for USDT or USDC—that’s the real, concrete indicator of confidence.

After what happened with UST some time ago, I’ve become especially sensitive to the transparency of stablecoin reserves. Put simply, in the “equivalent assets” that many projects write in their audit reports, you and I can’t really tell what they actually mean. For example, with a stablecoin that has a huge market cap, across multiple quarters they keep saying “overcollateralized,” but they never specify what kind of debt the collateral is (and its maturity), nor what the liquidity is like. If there’s a redemption rush and it really hits, those assets carrying the label “overcollateralized” might not be able to be liquidated at face value—and could fail to be cashed out at a discount within a single day.

Anyway, now I’ve gotten into the habit of checking each stablecoin’s official website once a month, to see whether the reserve reports they update are third-party verified and whether they offer something like USDC’s “custody accounts that can be verified.” Sometimes it feels kind of ironic—the most “stable” thing in the crypto world ends up being the biggest test of human nature. Don’t you think so? After all, everyone’s scared—what if one day you wake up and your U suddenly depegs?

As for DAI, I actually think its mechanism is more transparent by itself—at least you can check it on-chain anytime. But its stability is highly dependent on USDC, and that’s another risk. Anyway, that’s it for now—staying alert can’t hurt.