In a submit on X, one analyst now claims conventional fiat-backed stablecoins like USDT and USDC ought to put together for a “main” assault because of the growing recognition of Ethena’s USDe. The warning follows Ethena and USDe’s integration with Bybit, a crypto change permitting perpetual buying and selling.
Ethena Companions With ByBit
USDe is just not fiat-backed like different common stablecoins. As a substitute, it’s a “artificial greenback” backed by various property, primarily staked ETH derivatives and brief positions posted on centralized exchanges like Binance.
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Asserting the partnership, Ethena, the issuer of USDe, took to X to have fun the deal and its potential to remodel the crypto buying and selling scene. The platform mentioned merchants may earn a yield on USDe, which can be utilized as collateral for futures buying and selling.
Moreover, Ethena famous that customers can use their stablecoin in spot buying and selling pairs like Bitcoin and Ethereum with out paying charges.
Will This Scale back USDT’s Dominance?
Nonetheless, whereas the partnership is bullish for ENA, the native token of the Ethena platform, and will drive demand for USDe, one analyst is uncertain. The observer mentioned the deal constitutes a “direct” assault on the extra dominant stablecoins, USDT and USDC, which merchants extensively use in nearly all crypto perpetual buying and selling platforms.
The analyst identified gives Ethena dangles by way of the Bybit integration that would entice merchants away from USDT and USDC. For one, merchants incomes nothing at any time when they commerce perpetually will obtain a yield.
This yield, in flip, might be used to negate funding charges in the event that they select USDe over USDT or USDC as their margin. Given the excessive double-digit yield at present standing at 15%, the choice to dish out “free cash” for holding USDe, as anticipated, would affect the dominance of USDT and USDC.
Even so, there are questions concerning the excessive yields, with some saying the mannequin is unsustainable. Critics add that the $10 million Reserve Fund positioned as a security web gained’t be sufficient to stop a depeg when yields fall.
At present, USDT is the third most precious cryptocurrency after Bitcoin and Ethereum. When writing, it had a market cap of over $111 billion. As crypto finds adoption and costs recuperate from the latest plunge, the stablecoin will doubtless cement its place within the leaderboard.
However, USDe has a TVL of over $2.5 billion. From Ethena’s homepage, there are over 175,000 holders.
Characteristic picture from Canva, chart from TradingView