Ethena (USDe) is the latest stablecoin gaining hype in the cryptocurrency market, catching the attention of Bitwise President Teddy Fusaro. In a Twitter thread on April 10, Fusaro highlighted the protocol’s mechanics, describing USDe as potentially the fastest-growing USD-denominated asset in the history of crypto. He noted that USDe operates similarly to an ETF, with a fund that accepts contributions and issues units in the form of USDe tokens, which are then invested in a pre-determined portfolio. The portfolio consists of assets such as Bitcoin, Ethereum, ETH liquid staking tokens, and Tether USDT, balanced by short perpetual futures exposure to maintain a delta neutral value over time.
One of the unique features of USDe is that the reserves generate yield through staked ETH and futures interest, which is then distributed to all holders of USDe. Additionally, holders have the option to stake their USDe to receive sUSDe and earn even more yield. Fusaro sees the potential for massive interest payouts at scale, making it a significant total addressable market. Compared to traditional stablecoins like USDT and USDC, which are backed by centralized reserves primarily consisting of cash and U.S. Treasury bills, USDe offers a different yield distribution model that benefits its holders.
Despite the rapid growth and success of USDe, it still carries unique risks like any other asset. Fusaro highlighted risks such as exchange counterparty risk, exchange hacking risk, smart contract risk, and the possibility of negative futures funding. However, he believes that in the event of depegs or radical unwinds, USDe is unlikely to experience a collapse similar to that of TerraUSD in May 2022. TerraUSD collapsed alongside the network’s LUNA token due to internal algorithms causing hyperinflation, whereas USDe has shown resilience and ongoing success in the market.
USDe’s market cap has grown significantly in a short period, reaching $2.36 billion compared to less than $1 billion just one month ago. This growth has positioned USDe as the fourth-largest stablecoin in circulation, according to Stablecoin Stats. Fusaro expressed uncertainty about the future success of USDe but acknowledged the significant support and rapid growth it has experienced so far. As the hype around stablecoins continues to evolve, Ethena (USDe) stands out for its unique yield distribution model and potential for substantial interest payouts to its holders.
In conclusion, Ethena (USDe) is attracting attention in the cryptocurrency market for its innovative approach to stablecoin mechanics and distribution of yield to holders. Bitwise President Teddy Fusaro has highlighted the unique features of USDe, such as its delta neutral portfolio structure, earning potential through staked ETH and futures interest, and the option for holders to stake their tokens for additional yield. While USDe faces risks like any other asset, it has demonstrated resilience and rapid growth, becoming one of the largest stablecoins in circulation. The future success of USDe remains uncertain, but its immediate traction and support from the crypto community indicate promising potential in the stablecoin space.
