Ethena to Use Solana As Reserves for USDe, ENA Price Shoots 17%

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As a seasoned crypto investor with years of experience navigating the volatile digital asset market, I’ve witnessed my fair share of projects coming and going. However, the latest development from Ethena has certainly piqued my interest. The proposal to use Solana as a reserve asset for its synthetic dollar USDe is reminiscent of the early days of Bitcoin and Ethereum when innovative ideas like these were the driving force behind massive price increases.

Recently, the Ethena community unveiled a fresh plan involving Solana as a backup asset for their synthetic dollar USDe. This move has caused quite a stir, pushing up the value of Ethena (ENA) by an additional 17% today, reaching $0.39. Consequently, the market capitalization of Ethena surpassed $1.06 billion.

Ethena to Use Solana As A Backing Asset for USDe

This afternoon, the Ethena group unveiled a fresh idea concerning the support of their synthetic U.S. dollar, USDe. Remarkably, this plan for Solana backing from Ethena bears resemblance to the risk management strategy that Ethena uses for its perpetual futures in Bitcoin and Ethereum.

The proposal also includes the inclusion of Binance‘s Liquid Staked SOL (BNSOL) and Bybit’s Liquid Staked SOL (bbSOL) as acceptable assets for USDe. This expansion aims to broaden the variety of assets that back the synthetic dollar, thereby improving its versatility and effectiveness within decentralized finance (DeFi).

This August, Ethena unveiled their USDe stablecoin on the Solana blockchain, leveraging Layerzero’s OFT standard as outlined in a statement by the Ethena Foundation.

We plan to gradually implement the distribution, taking into account the advice from the Risk Committee due to the relatively short trading history, lower liquidity, and limited historical funding rate data associated with SOL perpetual futures.

Integrating Solana’s backing could significantly increase Ethena Finance’s earnings via SOL funding rates, potentially releasing an extra $2-3 billion in liquidity. This additional capital would enable Ethena to expand USDe’s circulation beyond its existing $2.5 billion, meeting the growing market demand more effectively.

In just a brief span of time, Etherna’s USDe Synthetic Dollar has experienced significant growth, reaching a market capitalization of $2.5 billion and positioning itself to challenge Tether. The USDe is a pioneering, scalable, and censorship-resistant cryptocurrency solution that maintains its stability by employing delta hedging derivative positions.

As an analyst, I find myself impressed by Ethena’s strategic move to introduce the UStb stablecoin in collaboration with BlockRock and Securitize. This partnership undeniably fortifies Ethena’s market standing and solidifies USDe as a formidable player in the competitive stablecoin sector.

ENA Price Jumps 17%

This week, Ethena’s native cryptocurrency, ENA, experienced a significant increase, approaching nearly $0.40. Currently at press time, ENA’s price has risen by 17%, standing at $0.3869. Notably, the market capitalization of ENA surpassed $1 billion again, reflecting robust bullish trends. Over the weekly chart, the price of ENA has climbed by a substantial 28%.

According to the current pattern in the technical chart, a recent breakout might point towards near-term price objectives for ENA at approximately $0.5080 and $0.69. If this level is surpassed, it could potentially reach its record high of $1.5.

Ethena to Use Solana As Reserves for USDe, ENA Price Shoots 17%

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2024-10-14 09:20