Ethena Labs Proposes SOL for a Stronger USDe Foundation
Ethena Labs, the creator of the synthetic stablecoin USDe, has proposed the inclusion of Solana (SOL) as a new collateral asset in its treasury.Â
Unlike traditional stablecoins such as Tetherâs USDT or Circleâs USDC, USDe operates as a synthetic stablecoin, meaning it is not backed by fiat currency at a 1:1 ratio. Instead, USDe maintains its $1 value by collateralizing various stablecoins and utilizing a hedged cash-and-carry trade strategy.Â
This involves taking futures positions with substantial open interest, helping stabilize its value while a reserve fund manages risks in changing market conditions.
If approved by Ethenaâs independent Risk Committee, SOL will be gradually integrated into USDeâs collateral framework, with an initial allocation target of $100-200 million. This amount would represent about 5-10% of SOLâs open interest, mirroring USDeâs existing stakes of 3% in Bitcoin (BTC) and 9% in Ethereum (ETH).
Additionally, the proposal includes the potential use of liquid staking tokens (LSTs) like BNSOL and bbSOL, similar to Ethenaâs current approach with ETH LSTs, which constitute one-third of its ETH holdings.
Recently, Ethena Labs allocated $46 million of its USDe reserve fund for tokenized real-world asset investments in various projects, including BlackRockâs BUIDL, Mountainâs USDM, Superstateâs USTB, and Skyâs USDS. This aligns with the growing trend in decentralized finance (DeFi) toward generating yield from asset-backed tokens.Â
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