Artificial dollar protocol developer Ethena Labs has added Bitcoin (BTC) to support its USDe stablecoin, the company's flagship product.
Advertising via social media platform X, Ethena Labs He says Using Bitcoin to support USDe is “a critical unlock that will enable USDe to scale significantly” from its current supply of $2 billion.
USDe aims to be a censorship-resistant stablecoin and maintains its on-chain backing through delta-hedged Ethereum (ETH) collateral – a mechanism described as “internet bonds.”
“The ‘Cyberbonds’ will combine revenues derived from Ethereum as well as funding and a spread basis from perpetual and futures markets, to create the first on-chain native crypto ‘bonds’ that can act as dollar-denominated savings.” Tool for users in permitted jurisdictions.”
Ethena Labs says Bitcoin's denser liquidity and higher open interest on exchanges make it ideal for supporting and scaling USDe compared to Ethereum.
“In just one year, BTC open interest (OI) on major exchanges (excluding the Chicago Mercantile Exchange) increased from $10 billion to $25 billion, while ETH OI grew from $5 to $10 billion.
BTC derivatives markets are growing faster than ETH and offer better scalability and liquidity for delta hedging…
Although BTC does not have a real yield like ETH, staking returns of 3-4% are less significant in a bull market when funding rates are over 30%.
The current environment is ideal for improving USDe scalability.”
Ethena BTC support for USDe is now reflected directly on its dashboard.
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