An analyst has warned that Ethena's USDE (a synthetic US dollar backed by assets such as ETH derivatives rather than fiat currency) is becoming increasingly popular and could disrupt stablecoins supported by traditional fiat currencies such as USDT and USDC.
This warning comes in the context of Ethena's collaboration with the cryptocurrency exchange Bybit, which supports perpetual trading and provides innovative incentives such as trading yields, which could divert traders from USDT and USDC.
However, critics question the sustainability of the high yield promised by USDE and believe that if the yield declines, the $10 million reserve fund may not be sufficient to maintain its peg.