Ethena Labs expands synthetic dollar USDe to Solana, plans SOL backing

Ethena Labs has expanded its “artificial greenback” USDe to the Solana blockchain and revealed intentions so as to add the SOL token as a backing asset for the stablecoin, in line with an Aug. 7 assertion.

USDe’s integration with Solana was achieved by way of LayerZero’s omnichannel fungible token (OFT).

Ethena Labs famous that over 90% of Solana’s $3.5 billion stablecoin provide doesn’t provide rewards. USDe goals to fill the hole and appeal to new customers by permitting them to transact on Solana whereas incomes rewards by way of its staked model, sUSDe.

Moreover, the corporate plans to suggest SOL and a liquid staking model — jitoSOL — as collateral property for USDe by way of a governance determination subsequent week. This transfer may unlock an extra $2 billion to three billion in open curiosity throughout main exchanges, additional enhancing USDe’s scalability.

Moreover, USDe holders on Solana can earn Ethena sats by staking USDe on DeFi protocols like Kamino, Orca, and Drift.

Market analysts famous that these strikes may increase USDe’s adoption amongst retail crypto customers. The Solana blockchain’s fast transaction velocity and low prices have helped it turn into a distinguished stablecoin community, attracting consideration from important fee firms like PayPal.

Following the announcement, USDe has shortly gained traction, with Solscan knowledge displaying its provide on Solana at $523,936 as of press time. In accordance with CryptoSlate’s knowledge, USDe is the fourth-largest stablecoin within the crypto market, with a circulating provide of $3.1 billion.

$100 million redemption

In the meantime, Ethena Labs’ enlargement occurred throughout the week USDe skilled its largest redemption of practically $100 million on Aug. 5 amid a broader crypto market sell-off.

Conor Ryder, Ethena Labs’ Head of Analysis, confirmed that USDe managed these redemptions successfully, sustaining its peg inside roughly 30 foundation factors regardless of market fluctuations.

USDe doesn’t depend on direct fiat or tangible asset backing, not like conventional stablecoins. As a substitute, it makes use of by-product hedging with collateral positions in ETH and Bitcoin and an arbitrage system for minting and redeeming to keep up its US greenback peg.