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🎉🔥 Ethena's Total Value Locked Hits $2 Billion, Questioning Long-term Viability Amid Success
The Ethena Protocol (ENA), known for its synthetic dollar stablecoin USDe, has seen its total value locked (TVL) shoot over $2 billion.
This surge in TVL amidst doubts from experienced industry professionals brings back memories of the Terra (LUNA) situation.
Concerns Arise Around Ethena’s USDe
Data from DefiLlama shows that Ethena’s TVL was $1.54 billion on April 1. By April 5, it soared beyond $2 billion, a 30% increase, indicating rising investor interest in Ethena.
The protocol’s high 27% annual percentage yield (APY) and the recent launch of an ENA token airdrop are drawing investors. On April 2, Ethena distributed 750 million tokens to eligible participants.
In related news, MakerDAO, which manages the DAI stablecoin, is considering a significant 600 million DAI investment in USDe via Morpho Labs.
Ethena’s popularity is supported by investments from notable names like Delphi Digital, Wintermute, and Galaxy Digital, lending it a layer of trust.
However, the rapid growth of Ethena has raised alarms. DeFi expert Andre Cronje expressed concerns that USDe might collapse like TerraUSD (UST), pointing to Ethena’s use of perpetual contracts and reliance on yield for 🔥
