Ethena USDe is a synthetic dollar developed by Ethena Labs to bring a stable, scalable, and censorship-resistant solution to the digital asset market. This currency operates on the Ethereum platform and is fully backed by on-chain assets.
Do you want to learn more interesting information about Ethena USDe? If so, please stay tuned for upcoming content from AZcoin.
What is Ethena Labs?
Ethena Labs is a decentralized stablecoin issuance protocol built on the Ethereum platform, designed to offer a stablecoin solution independent of the traditional banking system. This led to the creation of USDe, Ethena’s stablecoin, which is based on the delta-hedging strategy and is fully collateralized to ensure on-chain transparency, allowing it to be freely used across DeFi applications.
In addition, the Ethena Labs project introduces investors to a USD-based savings tool called the Internet Bond. This tool is built on the USDe platform, combining Liquid Staking Tokens (LST) returns with futures and perpetual swap markets.
It can be said that Internet Bond is the first on-chain bond that provides users worldwide with a USD-based savings tool.
What is Ethena USDe?
USDe is a type of stablecoin developed by Ethena Labs on the Ethereum platform, aimed at providing a stable, scalable, and censorship-resistant solution for the digital asset market. The currency was created to address two major issues: stablecoins being vulnerable to traditional financial institutions and users not having access to USD-based savings tools.
To tackle these issues, Ethena USDe offers the following solutions:
- Scalability: Achieved through the use of derivatives without the need for over-collateralization, thanks to the use of LST as collateral, secured by a corresponding short position.
- Stability: Maintained through non-leveraged short positions on LST from the moment USDe was issued.
- Censorship resistance: This is implemented by decoupling collateral from the banking system and storing it on decentralized platforms.
Additionally, it’s important to note that while USDe is classified as a stablecoin like USDT, the core development team at Ethena Labs avoids using this term, instead referring to it as a synthetic dollar.
Advantages and Disadvantages of Ethena USDe
Advantages
- Addressing the stablecoin trilemma: USDe is designed to ensure capital efficiency, maintain decentralization, and achieve price stability.
- Price stability: USDe possesses the inherent characteristic of a stablecoin, being less volatile compared to other cryptocurrencies, making it suitable for daily transactions and investments.
- Yield generation: USDe provides yield for holders, allowing them to earn income from holding the currency.
Disadvantages
- Funding risk: This occurs when negative funding rates persist, potentially affecting holders’ profitability.
- Liquidation risk: Exchanges may be forced to close derivative positions when the value of the collateral drops below the minimum threshold.
- Security risks: If the custodian OES used by Ethena fails, it could jeopardize the safety of assets. Additionally, if exchanges encounter issues or collapse, this could significantly impact users’ ability to trade and secure their assets.
Basic information about Ethena USDe
Specifications
- Token Name: Ethena
- Ticker: ENA
- Blockchain: Ethereum
- Token Standard: ERC-20
- Token Type: Governance
- Total Supply: 15.000.000.000
Token Allocation
Currently, Ethena USDe is being allocated according to the following ratio:
- Key members: 30%
- Ecosystem development: 30%
- Investors: 25%
- Foundation: 15%
Ethena USDe Use Cases
Ethena USDe is used for the following tasks:
- Stacking to receive rewards.
- Participate in platform governance.
- Provide liquidity with the platform.
How to own Ethena USDe?
If you want to own Ethena USDe, the best crypto exchanges we can recommend for you is the Binance Launchpool platform.
Besides, if you want to store this coin, you can try looking at names like MetaMask, Coin98 Wallet, Trust Wallet,…
Conclusion
Finally, we have come to the end together and this is all the content that we can compile and share with you. Thank you for taking the time to follow and see you again in new content at AZcoin.
I am Tony Vu, living in California, USA. I am currently the co-founder of AZCoin company, with many years of experience in the cryptocurrency market, I hope to bring you useful information and knowledge about virtual currency investment.
Email: [email protected]
