Ethena Labs to Expand USDe Stablecoin Supported by Bitcoin
Plans to expand the USDe stablecoin by include Bitcoin as an extra backing asset have been revealed by Ethena Labs.Ethena stated in their most recent social media postings that the goal of using Bitcoin as a supporting asset is to raise the $2 billion stability of USDe. With this upgrade, the stablecoin’s current structure will be improved by taking use of Bitcoin’s liquidity.
The statement implied that Ethena’s hedges currently make up about 20% of Ethereum’s open interest due to USDe’s notable growth since its founding.
Ethena Labs Describes the Advantages of Bitcoin
“The ability for USDe to scale has increased >2.5x with $25 billion of BTC open interest readily available for Ethena to delta hedge,” stated Ethena Labs.
Ethena Labs stated, “In just one year, ETH open interest increased from $5 to $10 billion, while BTC open interest on major exchanges (apart from CME) grew from $10 billion to $25 billion.”
The statement went on to explain that the expansion of the Bitcoin derivative markets is faster than that of Ethereum, offering better liquidity and scalability for delta hedging.
According to the publication, “Ethene’s scaling closer to $10 billion means that users will ultimately have a safer product.”
The business clarified that although Bitcoin “does not possess a native staking yield like staked ETH, staking yields of 3-4% are less significant in a bull market when funding rates are >30%” in response to concerns about the possible drawbacks of backing USDe with Bitcoin.
MakerDAO Suggests Investing $600 Million in USDe
Recently, MakerDAO suggested using Morpho Labs to channel $600 million in DAI into the USDe and its staked form, sUSDe. With this action, MakerDAO hopes to increase the lending capacity of Morpho Labs and bolster the diversity of its investment portfolio.
MonetSupply from Block Analitica claims that the choice is a reflection of user preferences for certain DeFi products and leverages, with a clear preference for USDe over sUSDe in order to lower liquidity risks and increase Ethena’s insurance fund.
The proposal suggests a maximum on investments of $600 million at first, with the possibility of raising it to $1 billion.
