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A New Type Of Stablecoin Has Officially Launched

April 1, 2024
x min read
A New Type Of Stablecoin Has Officially Launched

One of the most highly anticipated new projects in crypto is officially launching. And it’s aiming to disrupt the paradigm of stablecoins.

What’s happening:

  • Ethena’s governance token has officially launched on multiple centralized crypto exchanges
  • Ethena previously raised $14M USD in venture capital funding, led by prominent digital asset fund Dragonfly and BitMEX founder Arthur Hayes

The big idea:

  • Ethena is a synthetic stablecoin, which means they are not relying on direct fiat currency or asset backing in order to underpin its value
  • Instead, Ethena hedges derivative positions against collateral that is being held by the protocol and leverages different methods of arbitraging against new governance tokens being minted in order to maintain a stable peg
  • Any capital generated by Ethena hedging their positions or staking their Ethereum is then returned to the protocol to be shared with stablecoin holders

Why it matters:

  • Stablecoins have seen enormous new capital inflows with the upswing in the price Bitcoin and digital assets as a whole

By the numbers:

  • The current combined market capitalization of USDC and Tether is approximately $136B USD

Going deeper:

  • Circle, who is the parent company of popular stablecoin USDC, previously confidentially filed for an IPO on a major United States stock exchange

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