Artificial greenback developer Ethena Labs acquired the inexperienced gentle for a USDeFRAX liquidity pool with Frax Finance to diversify FRAX stablecoin yield.
The Singularity Roadmap proposal from Ethena Labs was accredited and has enabled the protocols to create a USDeFRAX POL with a $250 million ceiling on the defi stablecoin trade Curve.
Shifting ahead, USDe’s issuer and Frax Finance plan to ship dense on-chain greenback liquidity regardless of considerations that Ethena Labs’ product bears putting similarities to Terraform’s algorithmic stablecoin UST.
Fantom developer Andre Cronje pointed to USDe danger stemming from the asset’s peg system, which relies on collateralized positions to keep up parity with the U.S. greenback. The mechanism is akin to UST’s design, a decentralized structure that ultimately crippled Terra’s $60 billion ecosystem.
After the artificial greenback creator onboarded Bitcoin (BTC) to assist keep its peg, CryptoQuant founder Ki Younger Ju echoed Cronje’s considerations relating to a possible crypto contagion. UST and Terraform additionally tapped BTC as a reserve asset earlier than the defi undertaking crashed in Might 2022.
Ethena Labs’ USDe crosses $2b market cap
Though USDe could also be thought of a contentious defi stablecoin, the asset has drawn person demand and crossed $2 billion in provide since launching in February. Per DefiLlama, Ethena Labs provided its U.S. dollar-pegged token completely on Ethereum’s mainnet.
The protocol suffered a $290,000 safety exploit practically a month after its debut, however the concern was swiftly resolved. Specialists couldn’t decide the underlying vulnerability then, and Ethena Labs has superior to increase USDe integration throughout.
The stablecoin supplier airdropped its governance token ENA with 750 million free tokens for early supporters and individuals.