Analyst Warns that Ethena’s USDe Stablecoin Protocol Could Disrupt the Stablecoin Market and Pose Unpegging Risks
(Previous Summary:
Bybit Expands Partnership with Ethena: USDe Can Be Used as Collateral, Earn Sats, Participate in New Coin Mining… Arthur Hayes Bullish on $ENA Hitting $10
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(Supplementary Background:
Comprehensive Analysis of Ethena’s Q2 Token Strategy: How to Achieve APY of Over 1,100%
)
Table of Contents:
Ethena Keeps Traders Away from USDT and USDC
The Unstable Risk of Ethena
Details of Bybit’s Integration with USDe
The synthetic stablecoin protocol Ethena has recently gained popularity among cryptocurrency users due to its high returns and token incentives. However, an analyst has issued a warning that Ethena’s USDe stablecoin could disrupt the stablecoin market.
According to reports, on Tuesday (7th), when Ethena announced its partnership with cryptocurrency exchange Bybit, an analyst warned that Ethena’s USDe (a synthetic stablecoin backed by assets such as ETH derivatives instead of traditional fiat currency) could disrupt the stablecoins supported by USDT and USDC.
Furthermore, the analyst stated that Bybit’s support for USDe as collateral for perpetual contracts, along with its incentive measures to attract users, could lead traders to move away from USDT and USDC.
On the other hand, Zhu Su, the founder of Three Arrows Capital, mentioned the risks of Ethena in an interview with Dong Qu, stating:
Therefore, under extreme market conditions, Ethena’s so-called “Delta Neutral” mechanism may collapse if the exchange suddenly terminates the contract.
Additionally, critics have pointed out that the promised high yield of USDe is not sustainable and have expressed concerns that its $10 million reserve fund may not be sufficient to maintain the peg if the yield decreases.
However, the market’s acceptance of USDe is indeed continuing to increase. In an official announcement on Tuesday (7th), Ethena stated that it has reached a cooperation agreement with cryptocurrency exchange Bybit, and starting from this week, it will fully integrate its stablecoin product USDe into Bybit. The integration details are as follows:
USDe can be used as collateral for perpetual contracts:
Ethena first stated that through this cooperation, Bybit will integrate USDe as collateral assets into its Unified Trading Account (UTA), allowing users to use USDe as margin for perpetual contracts of all assets on Bybit.
Holding USDe in a Bybit account will earn Sats as rewards.
Bybit exchange will enable spot trading pairs of BTC/USDe and ETH/USDe.
Earn profits with USDe:
USDe will also be available on Bybit’s Earn platform, allowing users to participate in Launchpool mining.
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