Crypto News– Ethena’s USDe stablecoin, also known as an internet bond and a synthetic dollar, has surpassed the $2 billion supply milestone just seven weeks after its public debut.
Ethena Synthetic Dollar Surpasses 2 Billion Dollars Supply in Two Months
Ethena Labs confirmed the market capitalization, positioning it as the fifth-largest stablecoin by market cap, now constituting 1.25% of the entire $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 or a 70% market share. Circle’s USDC ranks second at $35 billion (22%), followed by MakerDAO’s DAI at $5 billion (3%), and First Digital’s FDUSD in fourth place with a market cap of $2.5 billion (1.5%).
What exactly is the USDe stablecoin offered by Ethena?
Unlike traditional stablecoins, USDe operates on a distinctive model that doesn’t depend on direct fiat currency or asset reserves. Instead, it integrates derivative hedging against collateral assets and an arbitrage mechanism for minting and redeeming, ensuring its stability against the U.S. dollar.
Furthermore, USDe employs a cash-and-carry trading strategy to generate yield, which is then distributed among stablecoin holders. For instance, it utilizes tactics such as staking ETH holdings obtained from USDe minters with Ethereum validators while simultaneously shorting an equivalent amount of ether futures.
Ethena previously allowed users to deposit U.S. dollars, ETH, or liquid staking tokens as collateral to mint USDe. Recently, the platform added bitcoin as a collateral asset, aiming to significantly scale USDe. This decision was influenced by traders’ increasing adoption of bitcoin, as it offers superior liquidity and a longer duration profile for delta hedging compared to liquid staking tokens.
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