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Ethena Labs has announced the addition of bitcoin as a backing asset for its USDe synthetic dollar, tapping into the growing enthusiasm for the world’s oldest digital asset among traders.
The decentralized finance (DeFi) protocol stated in a series of updates that anchoring USDe with Bitcoin will facilitate significant scalability, multiplying its capacity by more than 2.5 times and enhancing safety measures for traders. This strategic move arrives as bitcoin derivative markets outshine their ether-based counterparts.
“With Ethena’s scaling trajectory nearing $10 billion, this enhanced backing provides a more resilient foundation, ensuring a safer environment for users,” the protocol remarked, noting that the current supply of USDe is valued at around $2 billion.
Ethena also highlighted Bitcoin’s superior liquidity and duration profile for delta hedging compared to liquid staking tokens as a key factor in the decision to incorporate it as a backing asset.
Previously, USDe was solely supported by staked ether (ETH), as indicated on Ethena Labs’ website. However, heightened trader interest in Bitcoin prompted the protocol’s adjustment.
Ethena noted a substantial surge in bitcoin open interest, which soared by 150% to reach $25 billion over the past year, leading to more than doubling USDe’s scalability potential. In contrast, ether’s open interest grew by 100% to $10 billion during the same period, according to data provided by the protocol.
Bitcoin’s robust demand coincides with its remarkable surge in speculative value, currently trading at $68,384 according to The Block’s price data, marking a 4% increase over the past 24 hours.
Featured Image: Freepik
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