Ethena’s USDe Surges to $5.8 Billion Supply
Ethena’s USDe has recently eclipsed Sky’s Dai and USDS stablecoins, positioning itself as the third-largest dollar-pegged asset, following Tether’s USDT and Circle’s USDC. This token, which is secured through a mix of volatile assets, including Bitcoin and derivatives, has achieved a circulating supply of $5.8 billion, marking an impressive 85% increase over the last month. Notably, this is the first occasion since June 2023 that another dollar-pegged token has outperformed Dai.
The success of USDe can be largely attributed to its attractive yield, offering an annual return of 27%, significantly higher than the 12.5% provided by Dai and USDS. However, it is important to clarify that USDe does not fit the traditional definition of a stablecoin, which presents a different risk profile compared to its counterparts. In contrast to stablecoins like USDC and USDT, which are backed on a one-to-one basis by U.S. dollars or equivalent assets such as Treasury bonds, USDe is generated by depositing assets like Bitcoin, Ether, or Solana into the Ethena protocol. This protocol subsequently engages in short-selling on futures exchanges like Bybit, creating a delta-neutral position where the value of the assets and the shorts balance each other, maintaining a stable aggregate price. Currently, the bullish sentiment among traders leads to payments to Ethena for shorting, which the protocol redistributes to USDe holders through staking. If market sentiment shifts to bearish, however, the yield on USDe may decline.
Should Bitcoin Undergo a Redefinition?
Bitcoin advocate John Carvalho is proposing a transformative approach to how the leading cryptocurrency is quantified. Presently, one Bitcoin can be divided into 100 million smaller units known as satoshis. Carvalho’s proposal aims to establish the satoshi as the standard unit of account, effectively renaming it to Bitcoin itself. This change, reminiscent of a significant stock split of 100 million-to-one, would eliminate the necessity for decimal representations, allowing Bitcoin values to be expressed as whole numbers. For instance, a current value of 0.00010000 BTC would instead be represented as 10,000 Bitcoin.
This is not the first instance of the Bitcoin community discussing modifications to the asset’s unit structure. In 2017, Jimmy Song introduced BIP 176, which proposed the use of “bits” as a more straightforward denomination for smaller transactions. Critics of such proposals argue that altering the unit structure might confuse users, heighten the risk of transactional errors, and create complications for wallets and exchanges that are already designed around the existing system.
Cosmos Seeks Revival Through New Ecosystem Team
The Interchain Foundation (ICF), the governing body behind Cosmos, is implementing a strategic shift by acquiring the ecosystem team Skip, which will now operate under the new name Interchain Inc. This rebranding aims to revitalize Cosmos, with Skip co-founders Barry Plunkett and Maghnus Mareneck taking leadership roles in defining the project’s vision and market strategy. Once a frontrunner in the crypto space, Cosmos attracted prominent DeFi projects like dYdX and formed a robust partnership with the data availability network Celestia. However, recent months have seen Cosmos face obstacles due to controversies and legal challenges involving its executives, leading to diminished confidence and a lagging ATOM token compared to competitors. The hope is that with the integration of Skip, Cosmos can consolidate its fragmented ecosystem and enhance user engagement and liquidity across its interconnected blockchains.
This Week in DeFi Governance
VOTE: CoW DAO is considering extending solver rewards to both Arbitrum and Gnosis Chain.
VOTE: Arbitrum is evaluating the establishment of a new DAO-adjacent entity for strategic execution.
VOTE: Gnosis DAO is deliberating the creation of a grants program aimed at incentivizing early-stage DeSci projects.
Post of the Week
DefiLlama’s 0xngmi has analyzed recovery rates for DeFi protocols following hacks, revealing that only 39% of projects that experienced a significant hack managed to survive. Additionally, those that refunded users after a hack were found to be 4.6 times more likely to survive and retain their existing user base compared to those that did not offer refunds.
