MEXC cryptocurrency exchange has invested in synthetic dollar protocol Ethena

The MEXC cryptocurrency exchange has invested in synthetic dollar protocol Ethena in a broader push to promote stablecoin development and adoption.

MEXC cryptocurrency exchange has invested in synthetic dollar protocol Ethena and allocated $20 million to its stablecoin, USDe (USDE).

Announcing the investment on Feb. 26, the exchange also said it is launching a $1-million reward pool to encourage participation in USDe trading and staking.

“Stablecoins play a pivotal role in facilitating broader cryptocurrency adoption,” said MEXC’s chief operating officer, Tracy Jin.

Ethena Labs, the developer of USDe, has reportedly closed a $100-million funding round with the help of major investors, including Franklin Templeton. The funds were raised through a private sale of Ethena’s governance token, ENA (ENA).

Ethena will use the funds to build a blockchain and token for the traditional finance industry, Bloomberg reported.

Ethena’s USDe differs from other stablecoins, such as Tether’s USDt and USD Coin, by using a hedging strategy that is collateralized by cryptocurrencies. Ethena currently offers USDe holders a 9% yield.

The U.S. Securities and Exchange Commission earlier this month approved the country’s first yield-bearing stablecoin security from Figure Markets. The forthcoming YLDS stablecoin will offer users a yield of 3.85%.

Earlier this month, the U.S. Securities and Exchange Commission approved the country’s first yield-bearing stablecoin security from Figure Markets. The forthcoming YLDS stablecoin will offer users a yield of 3.85%.

The combined value of stablecoins now exceeds $220 billion, representing a gain of more than 73% since August 2023, according to data from Alphractal. Over that period, USDC’s dominance has been on a clear uptrend.

As of February 2024, the total value of stablecoins has risen to more than $220 billion, an increase of over 73% since August 2023, according to data from Alphractal.

Over that period, the proportion of USDC in the top 10 cryptocurrencies has also steadily increased. At the beginning of August 2023, USDC accounted for about 10% of the top 10 cryptocurrencies by market capitalization. However, by February 2024, USDC’s share had risen to nearly 23%.

Meanwhile, Tether’s USDt remains the largest stablecoin with more than $140 billion in circulation. The USDt issuer clocked more than $13 billion in profits last year as its U.S. Treasury holdings reached an all-time high.