Ethena Labs, the maker of synthetic dollars, received permission from Frax Finance to establish a USDeFRAX liquidity pool. This pool includes a $250 million ceiling on the defi stablecoin exchange curve, which improves the yield diversity of FRAX stablecoins.
According to Fantom’s Andre Cronje, USDe, which depends on collateralized holdings for its peg to the US dollar, poses risks despite similarities to Terraform’s UST. This model is similar to UST’s, which caused problems with Terra’s ecosystem.
In response to worries about possible cryptocurrencycurrency contagion expressed by Ki Young Ju and Cronje of CryptoQuant, USDe adopted Bitcoin to sustain its peg. Terraform and UST encountered similar difficulties.
Since its February inception, USDe has grown to have a market capitalization of over $2 billion, attracting user interest despite early security worries. A $290,000 security flaw was quickly fixed by Ethena Labs soon after the token’s release on the Ethereum mainnet.
In addition, the protocol has airdropped 750 million ENA governance tokens to early adopters and players, indicating additional ecosystem expansion and integration.
