Ethena Labs synthetic dollar’s market capitalization has risen to $2 billion less than two month after it was released on Ethereum mainnet.
According to DefiLlama, since its launch in February the stablecoin USDe’s market capitalization has increased by over 147%. CoinGecko classifies the cryptocurrency as being the fifth-largest token on the stablecoin markets.
USDe, a crypto with a yielding model that differs from stablecoins in general, holds cash reserves or cash equivalents as a way to keep pegs against fiat currencies such as the U.S. Dollar. USDe instead uses derivative hedging to protect collateral Bitcoin positions.BTCEthereumETH), ETH liquid staking tokens, and Tether (USDT).
Ethena’s artificial dollar has a 2 billion-dollar supply, and is the market leader. Circle’s Dollar Coin, USDT (USDC), DAIFirst Digital USD, (FDUSD), and USDe currently dominate stablecoin alternatives.
Luna, Ethena’s stablecoin and Ethena’s stablecoin are similar.
USDe The rise may have been meteoric. Ethena’s stablecoin shares many similarities with Terra’s algorithmic coin, UST. This product ultimately led to a $60 Billion collapse of the Terra currency in May 2022.
Blockchain developer and major Fantom (FTM) contributor Andre Cronje published A long form tweet on X assessing if USDe could be the next UST. CryptoQuant’s CEO Ki Young Ju, Founder of CryptoQuant. questioned If Ethena onboarding BTC as backing asset could trigger a contagion similar to that.
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Source: crypto.news
