#ENA There is no expectation of interest rate cut, and the rate cut is likely to be postponed. In the short term (the two months to June), it will be difficult again. I don’t have any bullets, so I can only lie down and watch the show.

Since there are too many fallacies in the explanations of ENA seen on the forum, I will briefly explain the two most talked about points (ENA shorted the market so it kept rising, and the loss of ENA funds shorting the rate caused the USDE to decouple and then plummet). (I am responsible for my own words, and the quoted data are all from its official white paper)

First of all, when generating usde (the stablecoin planned by ethena-labs), a short contract will indeed be opened on the exchange. For example, when you generate 1usde by pledging 1u of ETH, ethena will entrust 1u of ETH to the derivatives exchange (through "over-the-counter settlement") and use this 1u of ETH as margin to open a reverse perpetual contract for shorting ETH/USD. In this way, 1usde is equivalent to 1u to maintain its stability. (For example, if ETH falls by 50%, if there is no shorting at this time, then the 1u of ETH you pledged before is actually only worth 0.5u, and the usde you generated is actually only worth 0.5u. ​​But because there was shorting before, when ETH fell by half, the shorting profit doubled, and the actual collateral was still 1u. At this time, usde is still worth 1u. The rise can also be inferred) So because ENA is shorting, the market rises when ENA rises, and the market falls when ENA also rises. This is a fallacy.

Secondly, regarding the issue of income, there are two main sources of income. One is the income from staking ETH (these ETH come from the synthesis of usde), and the other comes from the short-selling funding rate. As mentioned above, usde ensures its stability by shorting equivalent collateral. There is a funding rate for shorting perpetual contracts, and the funding rate is positive most of the time, that is, shorting can obtain additional short-selling funding fees (derived from long-selling). There is also a statistic. According to the data in recent years, the proportion of negative funding rates is about 10% (that is, the probability of needing to spend funds is 10% and the probability of shorting to obtain income is 90%). Therefore, there is no need to worry about the problem of capital loss leading to the inability to repay user interest (one of the ten cards is a red card. If you draw a red card, you lose 1 yuan, and if you draw other cards, you earn 1 yuan. Will you go bankrupt because others keep drawing cards?). Therefore, it is also a fallacy to worry that it will cause usde to decouple due to rate losses.

Typing is really tiring. Anyway, if you really want to understand a coin, you might as well read the official white paper. The so-called cognitive cognition is not just hearing from others, but to find the place where it starts to learn, use your own logic to analyze, and combine it with the actual situation. Of course, what I said may not be right, welcome to correct me. And finally, everyone should try to take spot and less leverage contracts, and life will be peaceful and exciting.