Ethena Plans To Utilize Solana As a Reserve for USDe to Back Its Asset
In a recent development, the Ethena community has put forth a new proposal aimed at utilizing Solana, Ethereum’s Layer-1 competitor, as a reserve asset for its synthetic dollar, USDe. This move has led to a 17% surge in the price of Ethena (ENA) today, reaching $0.39Â and pushing its market cap beyond $1.06Â billion.
Solana as a Backing Asset for USDe
The proposal introduces the use of Solana as a backing asset for USDe, similar to the hedging mechanism employed by Ethena for BTC and ETH perpetual futures. Additionally, the proposal suggests including Binance Liquid Staked SOL (BNSOL) and Bybit Liquid Staked SOL (bbSOL) as eligible backing assets for USDe, aiming to diversify the asset pool supporting the synthetic dollar and enhance its utility in decentralized finance (DeFi).
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Ethana on Solana Blockchain
Ethena had launched its USDe stablecoin on the Solana blockchain in August this year, employing Layerzero’s OFT standard. The official announcement from the Ethena Foundation states that the proposed allocation would be gradually scaled in consultation with the Risk Committee, considering SOL perpetual futures’ shorter trading history, lower liquidity, and limited historical funding rate data.
The inclusion of Solana as a backing asset has the potential to increase the Ethena Finance protocol revenue through SOL funding rates and unlock an additional $2.3Â billion in open interest. This expansion would enable Ethena to scale USDe beyond its current $2.5Â billion supply and meet market demand.
Ethena’s USDe Synthetic Dollar has rapidly gained traction, achieving a market cap of $2.5 billion in a short period and positioning itself as a direct competitor to Tether. USDe is the first scalable, censorship-resistant, and stable crypto-native solution that ensures peg stability using delta hedging derivatives positions.
Furthermore, Ethena’s recent launch of the UStb stablecoin in collaboration with BlockRock and Securitize strengthens its market presence, positioning USDe as a strong contender in the stablecoin space.
Technical Analysis and Market Trends
The technical chart pattern indicates that the recent breakout could lead to immediate ENA price targets of $0.5080Â and $0.69. If it successfully surpasses these levels, it could reach its all-time high of $1.5.
The native cryptocurrency of Ethena, ENA, has experienced a significant surge over the past week, approaching $0.40. At present, the ENA price stands at $0.3869, reflecting a 17% increase and pushing its market cap back above $1 billion amid robust bullish activity. On the weekly chart, the ENA price has risen by 28%.
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Michael Onche: Crypto aficionado and seasoned analyst. With a keen eye for market trends and a passion for blockchain technology, he deciphers the intricacies of cryptocurrency with precision. Michael’s expertise and insightful content make him a trusted guide for navigating the dynamic world of digital assets.
