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
