Ethena Labs Adds Bitcoin as Collateral for USDe, Supercharging Scalability

Ethena Labs strategically adds Bitcoin as collateral for its synthetic dollar, USDe, aiming to enhance scalability. With USDe's rapid growth and the project's extensive short futures positions, the move leverages BTC's liquidity and scaling potential to potentially increase USDe by 250%. The integration is expected to bolster USDe's stability and is reflected in Ethena's dashboards starting the next day.

Ethena Labs Adds Bitcoin as Collateral for USDe, Paving the Way for Enhanced Scalability

In a strategic move aimed at significantly enhancing the scalability of its synthetic dollar, USDe, Ethena Labs has added Bitcoin (BTC) as a collateral asset.

USDe has witnessed remarkable growth since the launch of its airdrop campaign earlier this year, with its total value locked (TVL) rapidly approaching $2 billion. Consequently, Ethena's short futures positions, utilized to hedge the protocol's ETH exposure, have surged to 20% of total Ether open interest.

Recognizing the substantial liquidity and increased scaling potential offered by BTC derivative markets, Ethena anticipates that this move will empower it to scale USDe by an impressive 250%. The project's recently introduced ENA token currently trades around $1, resulting in a market capitalization of $1.5 billion.

Ethena's team acknowledges that while BTC lacks the native staking yield of ETH, its superior liquidity and duration profile more than compensate for this deficiency. Notably, in bullish market conditions where funding rates surpass 30%, staking yields diminish in significance.

By incorporating BTC as a backing asset, Ethena aims to bolster the scalability and overall stability of USDe. The integration of BTC will be reflected in Ethena's dashboards effective tomorrow.

This strategic move demonstrates Ethena's commitment to innovation and its unwavering pursuit of scalability. By leveraging the liquidity and stability of BTC, the project expects to unlock unprecedented growth opportunities for USDe and its users.

Ethena's addition of BTC as collateral for USDe is a testament to the project's forward-thinking approach and its dedication to providing a robust and versatile synthetic dollar ecosystem. As the crypto market continues to evolve, Ethena remains at the forefront of innovation, persistently seeking ways to enhance the accessibility, utility, and scalability of decentralized finance.