Behind Tether's monthly earnings of 500 million USD: Is the over-collateralization rate sufficient?

[Block Rhythm] I saw an interesting piece of data — the CEO of Tether revealed that they earn about 500 million US dollars every month from the US Treasury bonds they hold. This profit margin is indeed quite exaggerated.

However, a big shot has jumped out to pour cold water on it. He has a point: Tether making a lot of money is one thing, but how the dividend policy and the over-collateralization standards are set is another thing. You say your collateralization rate is high, but what specific asset types and volatilities are used to determine that? These details are not clearly explained by anyone.

The key issue is here—if Tether's liabilities are all in US dollars and its assets are all in highly liquid US Treasuries, then it’s relatively stable. However, if a bunch of illiquid private equity investments are mixed in, if something goes wrong, the market will definitely question whether your “over-collateralization” is sufficient to withstand it.

After all, the volume of USDT is significant, and if something goes wrong, it won't just affect one or two companies. When it comes to transparency, it's not enough to just present appealing numbers; people need to clearly understand the asset structure as well.