A synthetic dollar developer, Ethena Labs, obtained approval to establish a USDeFRAX liquidity pool with Frax Finance, incorporating a $250 million ceiling on the defi stablecoin exchange Curve, thus enhancing FRAX stablecoin yield diversification.
Despite similarities to Terraform’s UST, USDe faces risks per Fantom’s Andre Cronje, depending on collateralized positions for its peg to the US dollar. This model mirrors UST’s, which led to Terra’s ecosystem issues.
USDe integrated Bitcoin to support its peg, echoing concerns of potential crypto contagion from CryptoQuant’s Ki Young Ju and Cronje. UST and Terraform faced similar challenges.
USDe has recently surpassed a $2 billion market cap since its launch in February, drawing user interest despite initial security concerns. Ethena Labs swiftly addressed a $290,000 security exploit shortly after the token’s debut on Ethereum’s mainnet.
The protocol has also distributed 750 million ENA governance tokens to early supporters and participants through an airdrop, signaling further integration and growth in the stablecoin ecosystem.
