Will the stablecoin narrative track begin to explode with Ethena?

In the last bull market, the stablecoin narrative occupies an important ecological niche in the Crypto market. Whether it is $DAI, $FRAX or $UST, other algorithmic stablecoins have experienced relatively strong growth in different periods. Looking back at this cycle, except for the brief explosion of $LQTY and LSDFi, decentralized stablecoins have not seen a sustained period of explosion. The listing of Ethena @ethena_labs on Binance Launchpool is likely to become a catalyst for the narrative of decentralized stablecoins.

Ethena’s stablecoin model is a delta neutral strategy where users can mint $USDe with stETH as collateral, and Ethena achieves delta neutrality by opening an ETH short position. Users can gain two benefits:

1. ETH pledge income;

2. Short position fee income.

Currently, $USDe has a yield of 35.4%. Because the staking rate and the short position rate rate are not fixed, the rate of return on $USDe is also floating.

The current market capitalization of $USDe is 1.54 billion, accounting for approximately 10% of the total stablecoin market capitalization. Personally, I believe that the market value and market share of $USDe still have a lot of room for upside - it has a higher return than $UST, but the risk is lower than $UST.

In addition to $USDe, the overall market value of stablecoins also has large room for growth. AllianceBernstein, an asset management giant with $725 billion in assets under management, has predicted that the market value of stablecoins will reach $3 trillion in 2028. The total share of stablecoins currently in circulation is only $150 billion. This means that the potential growth of stablecoin market capitalization may be as high as 2,000%.

The total circulation of Ethena governance token $ENA is 15 billion, and the initial circulation is 1.425 billion, accounting for 9.5%. $ENA will be used for protocol governance. The top 2,000 wallets and Pendle YT holders in the points ranking can only obtain 50% of $ENA , and the remaining $ENA will be released linearly in 6 months.

The distribution ratio of $ENA tokens is:

Investors 25%; Team 30%; Ethena Foundation 15%; Ecosystem 28%; Binance Launchpool 2%.

According to the over-the-counter price of the OTC platform Whales Market, its initial circulation market value is between 1 billion and 1.5 billion.