Ethena adds Bitcoin to support USDe 💰🚀

You Can Now Use Bitcoin to Support USDe with Ethena Labs

Ethena Labs has recently made an exciting announcement regarding the integration of Bitcoin as a backing asset for USDe. This move is seen as a critical step to enhance the scalability of USDe, which currently has a market capitalization of over $2 billion.

Ethena and USDe

Ethena is a relatively new crypto project that was launched through the Binance Launchpool just a few days ago.
It operates as a DeFi protocol for synthetic dollars, with the stablecoin USDe playing a central role.
Since its launch in late February, USDe’s market capitalization has soared from 300 to 800 million, reaching 1.5 billion dollars by the end of March.
The recent release of the ENA token via the Binance Launchpool has propelled the market capitalization to over $2 billion within a short span of time.
While Ethena is built on Ethereum, USDe is already available on various layer-2 solutions like Arbitrum, Optimism, and BSC.

Bitcoin Supporting USDe

By introducing BTC as collateral for USDe, Ethena Labs has shared some key insights into this development.
Current statistics show that BTC has an open interest of 25 billion dollars, presenting a substantial increase in USDe’s scalability by more than 2.5 times.
Over the last year, the open interest in BTC derivatives on major exchanges has surged from 10 to 25 billion dollars, surpassing the growth in ETH derivatives.
With better liquidity and scalability, Bitcoin brings a more robust support structure to USDe, especially as Ethena approaches the $10 billion mark.

The $ENA Governance Token

The ENA token, launched by Ethena on April 2nd, initially demonstrated a strong performance by debuting on Binance at $0.3 and quickly rising to nearly $1.25.
Despite the initial surge, the token’s price later dropped to $0.93, failing to sustain levels above $1.20.
While some fluctuations have been observed, there is still a notable profit margin for early investors based on the debut price on various exchanges.
Although the post-launch hype may have led to a speculative bubble, the dynamics of the token’s performance remain uncertain in the short term.

Doubts Surrounding the Ethena Protocol

Concerns have been raised about Ethena Labs engaging in short selling operations involving BTC and ETH to enhance the safety of USDe for users.
The platform’s reported annual return of 37% has sparked doubts regarding the sustainability of this strategy and its potential impact on USDe’s market value.
To address vulnerabilities, short selling ETH futures has been incorporated alongside BTC futures, although skepticism within the crypto community persists.