Stronger

Bitcoin

USDe

Foundation

Ethena

Ethena Labs, the creator of the synthetic stablecoin USDe, has proposed the inclusion of Solana (SOL) as a new collateral asset in its treasury for a stronger USDe foundation.&nbsp; 
Unlike traditional stablecoins such as Tether’s USDT or Circle’s USDC, USDe operates as a synthetic stablecoin, meaning it is not backed by fiat currency at a 1:1 ratio. Instead, USDe maintains its $1 value by collateralizing various stablecoins and utilizing a hedged cash-and-carry trade strategy.&nbsp; 
This <a href="https://gov.ethenafoundation.com/t/proposal-onboard-sol-as-a-usde-backing-asset/232" target="_blank" rel="noreferrer noopener">involves</a> taking futures positions with substantial open interest, helping stabilize its value while a reserve fund manages risks in changing market conditions. 
If approved by Ethena’s independent Risk Committee, SOL will be gradually integrated into USDe’s collateral framework, with an initial allocation target of $100-200 million. This amount would represent about 5-10% of SOL’s open interest, mirroring USDe’s existing stakes of 3% in Bitcoin (BTC) and 9% in Ethereum (ETH). 
Additionally, the proposal includes the potential use of liquid staking tokens (LSTs) like BNSOL and bbSOL, similar to Ethena’s current approach with ETH LSTs, which constitute one-third of its ETH holdings. 
Recently, Ethena Labs allocated $46 million of its USDe reserve fund for tokenized real-world asset investments in various projects, including BlackRock’s BUIDL, Mountain’s USDM, Superstate’s USTB, and Sky’s USDS. This aligns with the growing trend in decentralized finance (DeFi) toward generating yield from asset-backed tokens.&nbsp; 
<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow"> 
 Also Read: <a href="https://www.cryptotimes.io/2024/10/07/is-usdts-biggest-stablecoin-title-in-danger/" target="_blank" rel="noreferrer noopener">Is USDT’s “Biggest Stablecoin” Title in Danger?</a> 
</blockquote>

Ethena Labs Proposes SOL for a Stronger USDe Foundation

The Crypto Times

Other articles published on Oct 14, 2024

Zilliqa implements monthly halving mechanism for mining rewards

MicroStrategy Leads Crypto Assets Despite Bitcoin Halving Struggles

US Regulators Received $19 Billion From Crypto Companies in 2024

Buterin outlines next steps for Ethereum’s proof-of-stake evolution

3 Stocks Worth Holding in the Upcoming Holiday Season

ITO: A Community-Driven Project with Strategic Growth and Strong Fundamentals

Join our free newsletter for daily crypto updates!