Ethena’s USDe stablecoin, also known as ‘internet bond’ and ‘synthetic dollar’, has surpassed its $2 billion supply threshold in just seven weeks since its public launch.
Ethena Labs’ market capitalization makes it the fifth-largest stablecoin by market capitalization, currently accounting for 1.25% of the overall $160 billion stablecoin market, according to The Block’s data dashboard.
Tether’s USDT remains the leading stablecoin with a market capitalization of $112 billion and a 70% market share. Circle’s USDC ranks second with $35 billion (22%), MakerDAO’s DAI follows with $5 billion (3%), and First Digital’s FDUSD ranks fourth with a market capitalization of $2.5 billion (1.5%). It is occupied.
Ethena’s USDe supply | the block
What is Ethena’s USDe stablecoin?
Unlike existing stablecoins, USDe uses a unique mechanism that does not rely on direct fiat or asset backing. Instead, it involves derivative hedging against collateral positions and an arbitrage system for issuance and redemption designed to maintain a peg to the US dollar.
It also leverages cash and carry transactions to generate yield, which is then shared back with stablecoin holders. For example, utilizing strategies such as staking ETH holdings (collected from USDe stablecoin miners) with Ethereum validators and simultaneously selling the same amount of ETH futures.
Ethena, which previously allowed users to deposit US dollars, ETH or liquid staking tokens as collateral to mint USDe, yesterday added Bitcoin as a collateral asset. The project will allow USDe to “scale significantly” as traders embrace Bitcoin, he said, pointing to Bitcoin’s superior liquidity and duration profile for delta hedging compared to liquid staking tokens as factors in the decision to add the asset.
Many in the cryptocurrency industry have highlighted the potential counterparty risk and other risks associated with USDe’s yield-generating strategy. Andre Krone Phantom’s.
The project recognizes these concerns and has detailed seven specific risks on its FAQ page. This includes a thorough examination of each issue, from funding rates to exchange failures and regulatory issues.
Last February, Ethena Labs raised $14 million at a $300 million valuation in a strategic funding round co-led by Dragonfly and Maelstrom, the family office of BitMEX founder Arthur Hayes. Ethena publicly launched its USDe stablecoin in December 2023, coinciding with its announcement of funding following its stealth launch.
Earlier this week, Ethena began the claiming process for the ENA governance token airdrop, distributing 750 million tokens, or 5% of the total supply of 15 billion, to eligible users as the tokens began trading on several central exchanges. .
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