Ethena ($ENA ): The New King of Decentralized Stablecoins
This week saw a significant "disruption": USDe has surpassed DAI.
(“Disruption” refers to one project overtaking another to become the leader in that category.
In the previous cycle, there were speculations that ETH would disrupt BTC.
In this cycle, we see discussions about SOL disrupting ETH.)
Currently, the market cap of the stablecoin USDe issued by Ethena has reached $5.7 billion, surpassing USDS (formerly DAI).
Why is this important?
$DAI (now renamed $USDS) has long been the category leader of quasi-decentralized stablecoins.
When people look for decentralized stablecoins, they usually opt for the category leader.
Projects like Gains Network are partly built on $DAI, one reason being its leadership position.
From now on, they might choose USDe.
Ethena ($ENA ) launched USDe in 2024. In less than a year, it has become the leading semi-decentralized stablecoin.
If you hold $USDe, you can now earn yields in the following ways:
Obtain an annualized yield of 20%+ through the Ethena interface.
Gain an annualized yield of 80%+ by using automatic leverage in the Morpho vault on Contango.
With the crypto bull market just beginning, the market cap of $USDe is expected to grow further with increasing momentum.
As market enthusiasm heats up, it is inevitable that comparisons will be made to Luna—the stablecoin project that skyrocketed before a severe crash in the last cycle.
Bullish Perspective: Ethena = A Luna without fraud.
Both are issuers of decentralized stablecoins.
Both offer 20%+ yields for their stablecoins.
Both are building on-chain ecosystems.
LUNA is part of the Cosmos chain, while ENA has expanded to multiple L2s and is exploring its own ETH L2.
The market cap of LUNA peaked at around $41 billion. In comparison, Ethena currently has a market cap of about $3 billion.
Of course, nothing is set in stone.
The growth of USDe may not be sustainable, and ENA reaching Luna-level valuations is far from certain. However, given its fundamentals and rapid rise, $ENA currently appears to be undervalued.
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