But what if the company behind USDT decides to cheat its holders,is there any way we can find out before a complete disaster? (for e.g. they start minting more coins unnecessarily)
is there any safety mechanism or a red flag indicator before its too late?
This is the problem for all the stable coins in the crypto market.
First created by Bitfinex exchange, if i am not wrong, claiming to be backed by real USD reserve, then followed by other exchanges who built USDT in other blockchain networks (Tron/Ethereum/BSC/Polygon...). All of them are built using smart contracts, but almost all of them have a set of parameters that allows devs to freeze balances at any time.
Those stable coins are acting as instrument for trading.