Ethena Suggests SOL as Strategic USDe Backing Asset
Ethena has put forth a proposal to allocate SOL (Solana) as a backing asset for USDe, its decentralized stablecoin, utilizing the same hedging mechanism presently employed with Bitcoin (BTC) and Ethereum (ETH) perpetual futures. This transfer may present new alternatives for the protocol to generate income by tapping into SOL’s open curiosity and favorable funding charges.
The Threat Committee will intently consider the plan, contemplating SOL’s shorter buying and selling historical past and comparatively decrease liquidity in comparison with BTC and ETH. Ethena will scale into the SOL market cautiously, aiming to keep up market stability whereas making the most of the projected progress.
SOL Potential to Enhance Protocol Income
In August, Ethena launched USDe on the Solana blockchain, marking a major step within the enlargement of the protocol. With SOL perpetual futures providing higher funding charges than BTC and ETH in 2024, there is a chance for Ethena to align with one of many largest blockchain ecosystems, probably boosting income as market circumstances enhance.
The proposal highlights that SOL’s $2 billion in open curiosity throughout varied buying and selling platforms, the place Ethena already operates, may permit the protocol to scale its USDe provide from the present $2.5 billion and meet rising market demand. The preliminary goal is to hedge $100-200 million in SOL positions, which might account for 5-10% of SOL’s open curiosity.
Threat Committee’s Function and Subsequent Steps
The Threat Committee is predicted to deliberate and approve the proposal, with SOL Liquid Staked Tokens like BNSOL (Binance) and bbSOL (Bybit) additionally being thought-about as a part of the allocation. These belongings would observe the same sample to the present ETH LST allocation inside USDe’s backing, not exceeding one-third of the overall SOL allocation.
The committee has seven days to reply and vote on the proposal. If authorised, SOL will develop into a part of the USDe backing, additional strengthening Ethena’s presence within the Solana ecosystem.
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