Synthetic dollar protocol developer Ethena Labs has added Bitcoin (BTC) to support of the company’s flagship USDe stablecoin.
Social media platform X announced through Ethena Labs Called Using Bitcoin to support USDe is “an important unlock that will allow USDe to expand significantly” at its current supply of $2 billion.
USDe aims to be a censorship-resistant stablecoin that maintains on-chain support through delta-hedging staked Ethereum (ETH) collateral, a mechanism described as an “internet bond.”
“The ‘Internet Bond’ will combine yields derived from staked Ethereum with fund and base spreads from perpetual and futures markets to create the first on-chain cryptocurrency-based ‘bond’ that can function as dollar-denominated savings. . This tool is intended for users in permitted jurisdictions.”
Ethena Labs says Bitcoin’s thicker liquidity and higher open interest on exchanges make it ideal for supporting and scaling USDe compared to Ethereum.
“In just one year, BTC open interest (OI) on major exchanges (excluding the Chicago Mercantile Exchange) grew from $10 billion to $25 billion, and ETH OI grew from $5 billion to $10 billion.
The BTC derivatives market is growing at a faster rate than ETH and offers better scalability and liquidity for delta hedging.
BTC does not have the same underlying staking yield as staked ETH, but a 3-4% staking yield is less important in a bull market with funding ratios exceeding 30%.
“The current environment is ideal for optimizing USDe’s scalability.”
Ethena’s BTC support for USDe is now reflected in real-time on the dashboard.
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