Analyst Warns that Ethena’s USDe Stablecoin Protocol May Disrupt Stablecoin Market and Carry Detachment Risk
(Previous Summary: Bybit Expands Collaboration with Ethena: USDe Can Be Used as Collateral, Earn Sats, Participate in New Token Mining… Arthur Hayes Bullish on $ENA Reaching $10)
(Background Supplement: Comprehensive Analysis of Ethena’s Q2 Token Strategy: How to Achieve APY Above 1,100%)
Table of Contents:
Ethena Will Draw Traders Away from USDT and USDC
Unstable Risks of Ethena
Bybit’s Integration of USDe Details
The synthetic dollar stablecoin protocol Ethena has recently gained popularity in the cryptocurrency community due to its high returns and token activities. However, an analyst has issued a warning that Ethena’s USDe stablecoin, which is backed by collateral such as ETH derivatives instead of traditional fiat currency, may disrupt stablecoins like USDT and USDC.
According to reports, on Tuesday (7), when Ethena announced its collaboration with cryptocurrency exchange Bybit, an analyst warned that Ethena’s USDe could disrupt traditional fiat-backed stablecoins like USDT and USDC. USDe is not supported by legal tender but instead backed by assets such as collateralized ETH derivatives.
The analyst also stated that Bybit’s support for USDe as collateral for perpetual contracts, along with incentives to attract users, may draw traders 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 Dongqin. Zhu Su stated:
Therefore, under extreme market conditions, Ethena’s so-called “Delta Neutral” mechanism may collapse due to the sudden termination of contracts by exchanges.
Furthermore, critics point out that the promised high yield of USDe is not sustainable and express concerns that its $10 million reserve fund may be insufficient to maintain the peg if the yield declines.
However, the market’s acceptance of USDe is indeed continuing to increase. In an official announcement on Tuesday (7), Ethena stated that it has reached a collaboration with cryptocurrency exchange Bybit and will fully integrate its stablecoin product, USDe, into Bybit starting this week. The integration details are as follows:
USDe can be used as collateral for perpetual contracts:
Ethena first mentioned that through this collaboration, Bybit will integrate USDe as collateral into its Unified Trading Account (UTA), allowing users to use USDe as margin for perpetual contracts involving all assets.
Holding USDe in a Bybit account will earn Sats as a reward.
Bybit exchange will enable BTC/USDe and ETH/USDe spot trading pairs.
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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