Help me trust my stablecoins

Hello everyone,

I'd like to discuss stablecoins.

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First, a mandatory disclaimer: I'm invested in crypto, believe in it, and none of the following is intended as mere FUD. I wanna talk about stablecoins fallacies and how we can protect ourselves from them.

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Months ago I started switching into stablecoins because it was my belief that the stock market could crash and drag cryptos down.

I was balls deep in UST because of that sweet 20% APY and was lucky enough to smell that something was fishy just 2-3 weeks before the ugly crash. To anyone that didn't get out in time, I feel your pain and I'm sorry for your losses.

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I then divided my liquidity into USDC, DAI and TUSD - just because everyone keeps saying that those are the safest.

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After the latest news of UST and USDD de-pegging, and Tether losing MarketCap each day, I started looking in detail into those stablecoins - since I feel like I avoided the UST bullet by luck, I don't want to get caught off-guard by the next (un)stablecoin.

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Here's what I found out about each of them, and to be honest I didn't find anything really REALLY trustworthy.

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Starting with USDC, which has the reputation of being a safe and over-collateralized coin.

Went to their website transparency page https://www.centre.io/usdc-transparency?hsLang=en and tried to find their reports of their collateral. Here's the latest (April 2022) https://www.centre.io/hubfs/PDF/2022%20Circle%20Examination%20Report%20April%202022.pdf?hsLang=en.

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What I see is just a "Trust me BRO" report from Grant Thornton, who states that there are 49,260,105,739 USDC in circulation and AT LEAST

49,260,105,739 USD in collateral.

No detail of how many USD they have in collateral anywhere (in either form of cash or treasuries).

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Also, Grant Thornton was involved in (at least) 2 major scandals: Italian Parmalat (2001) and British Patisserie Valerie (2021). In both cases, they stated that those companies were in a good financial state, when in fact they were Millions in debt.

I'm not saying they were involved, but surely they missed a couple of red flags here and there.

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Moving on to DAI, which at least gives us a list of all its collateral (decentralization always wins): https://daistats.com/#/overview

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What strikes me here is that it's collateralized by 130% (not THAT much) and mostly by other cryptos.

What's gonna happen if those cryptos decline by 50%?

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Lastly, TUSD.

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They claim two audits:

By Slowmist: https://www.slowmist.com/en/security-audit-certificate.html?id=da89f3bcee330bc239754e7283cc8dcdbbbea82651146a03b44ae5ae3dd2ba4c

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and by Certik: https://www.certik.com/projects/trueusd?utm_source=CMC&utm_campaign=AuditByCertiKLink

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The first one states that they Passed the:

• Overflow Audit
• Race Conditions Audit
• Permission Vulnerability Audit
• Safety Design Audit
• Denial of Service Audit
• Gas Optimization Audit
• Design Logic Audit
• "False-Deposit" Vulnerability Audit
• Malicious Event Log Audit
• Scoping and Declarations Audit
• Replay Attack Audit
• Uninitialized Storage Pointer Audit
• Arithmetic Accuracy Deviation Audit

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but none of those include a Collateral Audit.

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The second Audit certifies that their contracts are "mostly trustworthy and hack-resistant." Again, not talking about collateral.

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I intentionally avoided Tether, 'cause... you know why.

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In short, USDC just says "You're covered" but we cannot know by how much. DAI gives us the exact collateral posted, but it's mainly cryptos. TUSD was audited for contracts safety, but not for collateral.

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I know nothing's certain in crypto, but what am I missing?

How can people be so certain those projects are safe?

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Thanks in advance to anyone who comments.