Ethena, a DeFi project based on Ethereum, has witnessed a remarkable surge in the value of its native cryptocurrency ENA, 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 surpassed $920 million. In addition, the daily trading volume of ENA has increased by 180% and reached $233 million.
USDe, the stablecoin offered by Ethena Finance, has experienced substantial growth in recent months, with a market value of $3 billion. This has made it one of the fastest-growing DeFi projects in history. Notably, popular crypto trader Eugene Ng Ah Sio has suggested that Ethena is directly competing with Tether, indicating that USDe is transitioning from being a DeFi-based stablecoin to a legitimate stablecoin.
The USDe stablecoin enables users to achieve a delta-neutral position by investing $1, which is 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, resulting in a total value locked of $3.7 billion within just seven months of its launch.
USDe stands to benefit from the Federal Reserve’s rate cuts, as it offers a premium of 5-8% above the funding rates set by the Fed. This attracts capital seeking higher returns. With the start of the Fed’s rate-cutting cycle, the difference is expected to widen, making USDe even more appealing to users.
A crypto analyst has also highlighted that the introduction of the UStb stablecoin could further enhance the adoption of USDe. Moreover, the price of ENA has risen by 60% in the past month, indicating a significant market recovery.
Ethena’s USDe stablecoin possesses a competitive advantage in the market due to its secure structure and high yield rates. Its ability to directly compete with major rivals like Tether could expedite the adoption of USDe. With its attractive return opportunities, USDe has become a prominent player in the stablecoin market.
Please note that the information provided in this article should not be considered investment advice. Investors should be aware of the high volatility and risks associated with cryptocurrencies and should conduct their own research.
