The cryptocurrency world is abuzz with the latest stablecoin sensation known as Ethena (USDe), and Bitwise President Teddy Fusaro is closely monitoring its rise. In a recent Twitter thread on April 10th, Fusaro highlighted the unprecedented growth of USDe, calling it potentially the fastest-growing USD-denominated asset in the history of crypto.
Fusaro delved into the mechanics of USDe, likening its operation to that of an ETF. Despite Bitwise not having any current investments in Ethena, Fusaro dissected how the protocol functions by accepting contributions from Authorized Participants (APs) and issuing USDe tokens that are backed by a diverse portfolio.
The core holdings of Ethena’s portfolio include Bitcoin (BTC), Ethereum (ETH), ETH liquid staking tokens, and Tether USDT, alongside short perpetual futures exposure. This unique structure maintains a “delta-neutral” portfolio to ensure a stable dollar-denominated value over time.
What sets USDe apart from traditional stablecoins like USDT and USDC is its profit-sharing mechanism. The reserves in Ethena generate yield that is distributed to all USDe holders, with additional yield opportunities for those who stake their USDe to receive sUSDe.
Despite its innovative approach, USDe is not without risks, as Fusaro cautions against exchange counterparty risk, smart contract vulnerabilities, and the potential for negative futures funding. Nonetheless, Fusaro is optimistic about the growth and support for USDe, as evidenced by its rapid ascent to a $2.36 billion market cap, making it one of the largest stablecoins in circulation.
In the ever-evolving crypto landscape, Ethena (USDe) is a compelling contender that has piqued the interest of industry experts like Teddy Fusaro. As the stablecoin ecosystem continues to expand, USDe’s unique features and rapid growth signal a potential game-changer in the world of USD-denominated assets.
