Developer Andre Cronje printed a publish questioning whether or not Ethena would be the subsequent UST.
In a publish on X on April 3, Cronje in contrast Ethena (USDe) to the notorious UST stablecoin.
“UST I had a excessive diploma of confidence would fail, the merely mechanisms didn’t make sense to me, nonetheless, lots of people I think about to be very sensible have been very vocal about the way it can’t fail, this reached a degree the place I used to be satisfied “I used to be incorrect.”
Cronje analyzed the construction of perpetual contracts, a spinoff product that permits merchants to take a position on the value actions of an asset with out holding the asset. He highlighted a vital vulnerability on this system: the dependence on income-generating property resembling staked Ethereum (stETH) as collateral.
By drawing a parallel between the structural flaws he sees in USDe’s system and the mechanisms that led to Terra’s downfall, Cronje raises a purple flag concerning the sustainability of advanced monetary merchandise that lack clear threat mitigation methods.
Responding to Cronje’s criticism, Ethena Labs founder Man Younger, often known as Leptokurtic, acknowledged the validity of the considerations raised.
Yesterday, Ethena Labs introduced the launch of its governance token, ENA, and the growth of its yield-earning stablecoin, artificial greenback token USDe. As well as, Ethena launched an airdrop of 750 million ENA.
Customers who take part within the Shard Marketing campaign can declare free tokens. The variety of cash individuals obtain will likely be proportional to the ‘shards’ or factors collected earlier than April 1.