Seraphim, the head of the growth department at Ethena Labs, the development company behind the stablecoin protocol Ethena, mentioned on Sunday in the community platform X the recent progress made by the protocol. This progress includes the proposal to collateralize the native token SOL of the Solana blockchain as an asset for the stablecoin USDe, the launch of the new stablecoin UStb in collaboration with Securitize and BlackRock, over $3 million in cross-chain deployments, and the aim to cover one billion users in the CeFi (Centralized Finance) sector.
A proposal on the Ethena governance forum suggests adding SOL as a supporting asset for USDe in a controlled and planned manner, using a similar mechanism to the perpetual contracts hedge strategy currently employed for Bitcoin (BTC) and Ether (ETH) by Ethena. Additionally, the proposal suggests considering BNSOL (Binance Liquid Staking SOL) and bbSOL (Bybit Liquid Staking SOL) as additional supporting assets for USDe.
The proposal points out that SOL has approximately $2 billion in open interest contracts on the platforms where Ethena currently executes hedge trades, in addition to the favorable funding rates compared to BTC and ETH seen so far in 2024. This provides an attractive opportunity for Ethena and USDe to further collaborate with one of the largest ecosystems in the crypto space and potentially increase protocol revenue when market conditions improve.
The proposal author believes that, aside from potentially increasing protocol revenue through SOL funding rates, this move would also release an additional $20 to $30 billion in open interest, allowing Ethena to continue scaling on top of the current supply of USDe, which is approximately $2.5 billion, and keep up with any potential growth in market demand.
Related articles: “What is Ethena? A Five-Minute Tutorial to Understand the Stablecoin USDe and Ethena” and “Market Funding Rates Turn Negative! Stablecoin Protocol Ethena Faces Its Biggest Challenge Since Launch.”
