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GM, Tim here.
Ethena’s USDe soars to a $5.8 billion supply.
Should Bitcoin be rebased?
Cosmos changes course with a new ecosystem team.
USDe’s on fire
Ethena’s USDe has surpassed Sky’s Dai and USDS stablecoins, becoming the third-biggest dollar-pegged asset behind Tether’s USDT and Circle’s USDC.
The token, which is backed using a combination of volatile assets like Bitcoin and derivatives, hit a circulating supply of $5.8 billion, an 85% increase over the past month.
It’s the first time another dollar-pegged token has overtaken Dai since it ascended to the number three spot in June 2023.
Key to USDe’s success is the yield it offers. The token generates 27% annually, far above the 12.5% offered on Dai and USDS.
To be sure, USDe isn’t technically a stablecoin, and therefore comes with a different set of risks compared to other similar assets.
Stablecoins like USDC and USDT are backed at a one-to-one ratio by dollars or dollar-equivalent assets like US Treasury bonds.
USDe, on the other hand, is created by depositing Bitcoin, Ether, or Solana to the Ethena protocol, which then opens shorts, or bearish bets, on futures exchanges like Bybit.
This creates a so-called delta neutral position where the value of the assets and the short cancel each other out to remain at a stable price in aggregate.
Because most traders are bullish on crypto at the moment, they pay money to Ethena for shorting, which the protocol passes on to USDe holders through staking.
As long as this situation continues, yields on USDe should stay high. But if traders flip bearish, Ethena won’t be able to deliver such high yields.
One ‘new’ Bitcoin?
Bitcoin advocate John Carvalho wants to redefine how the top crypto is measured.
Right now, one Bitcoin can be split into 100 million sub units called satoshis.
What Carvalho wants to do is make the satoshi the default unit of account and rename it to Bitcoin.
The change, similar in concept to a huge 100 million-to-one stock split, would eliminate the need for decimal places, and present Bitcoin values in whole integers.
For example, what is currently shown as 0.00010000 BTC would be displayed as 10,000 Bitcoin.
It’s not the first time the Bitcoin community has debated changes to the asset’s unit structure.
In 2017, Jimmy Song proposed BIP 176, which introduced “bits” as a standard denomination, aiming to simplify small transactions.
Critics of both ideas caution that shifting the unit structure could confuse users, increase the risk of mistakes in transactions, and create logistical challenges for wallets and exchanges already built around the current system.
Cosmos’ ICF acquires Skip
Cosmos, is adding a few fresh faces to revitalise the ailing project.
The Interchain Foundation, the organisation stewarding Cosmos, has acquired ecosystem team Skip, renaming it to Interchain Inc.
Interchain Inc will lead Cosmos’ product, vision, and go-to-market with Skip co-founders Barry Plunkett and Maghnus Mareneck at the helm, according to a blog post announcing the move.
At one point, Cosmos was one of the hottest projects in crypto. It attracted DeFi giants like perpetual futures exchange dYdX to build on it, and formed a strong alliance with data availability network Celestia.
But in recent months, Cosmos has struggled. Controversies and legal fights implicating the project’s executives have shaken confidence.
Its ATOM token has also lagged its competitors.
The hope is that with the help of Skip, Cosmos can unite its fractured ecosystem and grow users and liquidity across all its interconnected blockchains.
This week in DeFi governance
VOTE: CoW DAO to extend solver rewards to Arbitrum and Gnosis Chain
VOTE: Arbitrum mulls new DAO-adjacent entity for strategy execution
VOTE: Gnosis DAO votes to create grants programme to incentivise early stage DeSci projects
Post of the week
DefiLlama’s 0xngmi explores post-hack recovery rates for DeFi protocols.
among projects that had a major hack, only 39% survived as a project
projects that refunded users after a major hack are 4.6x more likely to survive and keep existing vs those that didn't pic.twitter.com/DQ0F2xYdpb
— 0xngmi (@0xngmi) December 15, 2024
Got a tip about DeFi? Reach out at tim@dlnews.com.
