Ethena Labs’ USDe Synthetic Dollar Debuts as Margin Collateral on Bybit

Ethena Labs’ USDe Token Joins Bybit as Margin Collateral Amid Growing Adoption

Ethena Labs has announced the launch of its synthetic dollar, USDe, as a margin collateral on the cryptocurrency exchange Bybit, marking a significant development in the adoption of the USDe token. This new integration allows USDe to be used as margin collateral with an annual percentage rate (APR) of up to 20%, offering traders enhanced efficiency and flexibility in their trading strategies.

Enhanced Trading Flexibility

Ben Zhou, the co-founder and CEO of Bybit, highlighted the benefits of this integration. “By leveraging USDe, traders can now benefit from a unique combination of stability and potential yield while managing their collateral. For Bybit users, this means access to a diversified range of stablecoin options, including a crypto-native solution like USDe,” Zhou stated in an interview with Cointelegraph.

Earning Rewards on Collateral

Guy Young, the founder of Ethena Labs, explained that the new integration also enables Bybit users to earn rewards on their collateral. Young mentioned, “Users will be able to benefit from potential rewards and value accrual on their collateral while trading on Bybit for the first time. This can help offset funding costs on their positions and capture more value for users.”

Ethena Labs’ Growing Popularity

Ethena Labs has become one of the most prominent protocols in 2024. According to José Maria Macedo, CEO of Delphi Labs and founding partner of Delphi Ventures, Ethena could emerge as the highest revenue-generating crypto project in the market. The high yield of Ethena Labs’ USDe is seen as a testament to the protocol’s strength. Zhou praised this achievement, saying, “Ethena’s ability to maintain a high yield on USDe despite initial concerns is a testament to the strength of their protocol, especially given the challenging market conditions.”

Performance and TVL of USDe

Since its launch in February, Ethena’s USDe synthetic dollar initially offered a 27.6% annual percentage yield (APY), raising concerns among crypto investors due to its significantly higher yield compared to the 20% offered by Anchor Protocol on Terra’s UST before its collapse in May 2022. Despite these concerns, the synthetic dollar has maintained a high yield of over 12.3% APY for over 262,000 users.

Currently, USDe is valued at over $3.2 billion in total value locked (TVL), although its TVL decreased by over 10.9% in the past month, according to DeFiLlama. Ethena Labs is optimistic that the new integration could contribute to the growth of USDe’s TVL, with Young expressing hope that this partnership will lead to broader adoption and usage of USDe.

Future Prospects

Young emphasized, “We hope this partnership leads to wider adoption and usage of USDe in a variety of use cases. The opportunity for USD collateral on exchanges is substantial, and we aim to play a meaningful role in that growth.”

FAQ: Ethena Labs’ USDe Synthetic Dollar Launch on Bybit

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