Exciting news from Portugal’s crypto start-up corner: Ethena has triumphantly secured a whopping $6 million in a seed funding round shepherded by crypto venture capital heavyweight, Dragonfly, and billionaire brain, Arthur Hayes. Aiming its sights on the third quarter for the launch of its stablecoin and bond asset, the young company has demonstrated unfaltering poise amidst the crypto turmoil.
Gracious contributors to the funding round included the Hayes family office, Maelstrom, and BitMEX, and key players Deribit, Bybit, OKX, Gemini, and Huobi. These are undeniably formidable names in the industry.
Ethena’s ambitious chart a course that pivots on a remarkable concept: a stablecoin, entitled USDe, and digital savings bond that are tethered to derivatives, and safeguard their worth in respect to the US dollar, independent of typical financial structures. Quite an ambitious plan, needless to say. As a fresh prospect in the field, the company has maintained a dedicated focus on this unique assembly of a digital currency and savings bond.
Sceptics might question the stability of the proposed stablecoin, USDe, and its capacity to sustain its value at $1. However, Ethena assures potential users that a hedging mechanism that deploys user-furnished collateral to hedge against Ethereum using perpetual swaps will maintain the coin’s stability. This mechanism is reported to balance out any losses or gains seamlessly.
On the other hand, the launch of USDe stands as a bold rival to the notorious TerraUSD, whose peg to the dollar conked out after a wave of crypto-market sell-offs last year. Even the $2B purchase of UST by Terraform Labs could only heal the peg partially before another wave of sell-offs, the inflation of UST’s sibling token, LUNA, and a crash in both their prices.
Reacting to the Terra roux, Hayes postulated an alternative – a crypto derivative-backed stablecoin that would hold its $1 peg through the skillful orchestration of exchanges. This proposed stablecoin would rest on a collection of short BTC positions and USD inverse perpetual swaps, sustaining its 1:1 peg to USD with deft mathematical maneuvers by all entities involved.
Ethena’s audacious stablecoin undertaking signals a transformative shift in the crypto landscape, striving to preserve value while offering decentralization and capital efficiency. However, the giant Terra mishap sits as a timely reminder of the volatility that could knock even the sturdiest of plans. Let’s watch closely to see how Ethena’s stablecoin endeavor plays out later this year.
Source: Cryptonews
