Ethena, a DeFi project based on the Ethereum platform, has seen a significant surge in its native cryptocurrency ENA, which is now posing as a direct competitor to Tether’s stablecoin. The price of ENA has risen by 25% to reach $0.35, and its market capitalization has exceeded $920 million. Additionally, ENA’s daily trading volume has increased by 180%, reaching $233 million.
The USDe stablecoin, developed by Ethena Finance, has quickly gained popularity and reached a market value of $3 billion in recent months, making it one of the fastest-growing DeFi projects in history. Notably, crypto trader Eugene Ng Ah Sio suggests that Ethena is entering into direct competition with Tether and predicts that USDe will transition from a DeFi-originated stablecoin to a legitimate stablecoin.
The USDe stablecoin allows users to achieve a delta-neutral position by investing $1, which is then divided between staked ETH and a short position on ETH, generating returns. Currently, sUSDe offers the highest sustainable yields among stablecoins, ranging from 10% to 13% APY. These features have contributed to its rapid growth, with a total value locked of $3.7 billion just seven months after its launch.
Ethena’s USDe stablecoin also benefits from offering a premium of 5-8% above the Federal Reserve’s funding rates, attracting capital in search of higher returns. As the Fed’s rate-cutting cycle began last month, this difference is expected to widen, further increasing the attractiveness of USDe to users. In fact, a crypto analyst believes that the launch of the UStb stablecoin could boost the adoption of USDe even more. Additionally, the price of ENA has experienced a 60% increase in the past month, indicating a significant market recovery.
The secure structure and high yield rates of Ethena’s USDe stablecoin give it a competitive advantage in the market. Its ability to directly compete with major rivals like Tether could accelerate the adoption of USDe, as it offers attractive opportunities for returns. It is important for investors to note that cryptocurrencies carry high volatility and risk, and they should conduct their own research before making any investment decisions.
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Disclaimer: The information provided in this article is not intended as investment advice. Investors should be aware of the high volatility and risk associated with cryptocurrencies and should conduct their own research.
