Ethena Labs Adds Bitcoin Backing to USDe Amidst Market Surge
Ethena Labs has integrated bitcoin as a backing asset for its USDe synthetic dollar, capitalizing on the renewed interest in the world’s oldest digital asset among traders.
The decentralized finance (DeFi) protocol announced this move on X, emphasizing that pegging USDe to bitcoin will increase its scalability by over 2.5 times and enhance safety for traders. With USDe’s current supply valued around $2 billion, Ethena anticipates a more robust backing nearing $10 billion. The decision to incorporate bitcoin stems from its superior liquidity and duration profile for delta hedging, outperforming liquid staking tokens.
Previously, USDe relied solely on ether liquid staking tokens, but growing demand for bitcoin trading prompted the change. Over the past year, bitcoin open interest skyrocketed by 150% to $25 billion, doubling USDe’s scalability, while ether’s open interest increased by 100% to $10 billion. This move aligns with bitcoin’s soaring value, currently trading at $68,384, marking a 4% increase over the past 24 hours according to The Block’s price data.
Clever Robot News Desk 7th April 2024
