Ethena's USDe is supposed to maintain a $1 peg at all times. Since its release, over $2 billion in USDe has been issued, with demand continuing to grow. The controversial platform is currently generating an annual yield of 37% (a seven-day rolling average that can change) by shorting ether. Funding rates are periodic payments either to traders that are long or short based on the difference between perpetual contract markets and spot prices.
While such a strategy has attracted detractors, demand has continued to grow — as over $2 billion in USDe, its synthetic dollar, has been issued since its release. USDe is supposed to maintain a $1 peg at all times, mimicking a stablecoin but with a different backing mechanism. Developers say adding bitcoin to the mix will boost user yields while helping USDe issuance grow further. “After the unprecedented growth or USDe since launch, Ethena hedges represent ~20% of ETH open interest as of today,” Ethena developers said in an X pos
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Ethena to Back USDe Token with Bitcoin for Increased Safety and ScalabilityEthena announces plans to back its USDe token with Bitcoin, citing its safety and robustness compared to other assets. With Bitcoin's increasing open interest, USDe has the potential to scale by a factor of 2.5.
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