Ethena Labs integrates Bitcoin as a collateral asset for the crypto project's synthetic dollar
Synthetic dollar protocol developer Ethena Labs has added Bitcoin (BTC) to support its USDe stablecoin, the company's flagship product.
Ethena Labs announced via the social media platform
USDe is intended to be a censorship-resistant stablecoin that maintains its on-chain support through delta-hedged Ethereum (ETH) collateral – a mechanism called “internet bond.”
“The 'Internet Bond' will combine the yield from staked Ethereum as well as the funding and basis spread from perpetual and futures markets to create the first on-chain crypto-native 'Bond', known as on Dollar-denominated savings instrument for users in eligible jurisdictions.”
According to Ethena Labs, Bitcoin is ideal for hedging and scaling USDe compared to Ethereum due to its greater liquidity and higher open interest on exchanges.
“In just one year, BTC Open Interest (OI) on major exchanges (excluding the Chicago Mercantile Exchange) has increased from $10 billion to $25 billion, while ETH OI has increased from $5 to $10 billion has grown.
BTC derivatives markets are growing faster than ETH, offering better scalability and liquidity for delta hedging…
While BTC does not have a native staking return like staked ETH, staking returns of 3-4% are less significant in a bull market when funding rates are above 30%.
The current environment is ideal for optimizing USDe’s scalability.”
Ethereum's BTC support for USDe is now live on its dashboard.
Don't miss a thing – Subscribe to receive email alerts straight to your inbox
Check price action
Follow us on Twitter, Facebook and Telegram
Surf the Daily Hodl Mix
 
Disclaimer: Opinions expressed on The Daily Hodl do not constitute investment advice. Investors should conduct their due diligence before making any risky investments in Bitcoin, cryptocurrencies or digital assets. Please note that your transfers and transactions are at your own risk and any losses you incur are your responsibility. The Daily Hodl does not recommend the purchase or sale of cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl is involved in affiliate marketing.
Generated image: Midjourney
Learn Crypto Trading, Yield Farms, Income strategies and more at CrytoAnswers
https://nov.link/cryptoanswers
Comments are closed.