Ethereum stablecoin developer Ethena secures $6 million funding

July 18, 2023 04:18 AM AEST | By Invezz

Ethereum stablecoin developer Ethena secures $6 million funding — Image source: Invezz

Ethena has a unique approach to stablecoins

The stablecoin industry, like much of the broader cryptocurrency market, is still largely nascent. Also importantly, the wider sector is fast learning from some of the biggest challenges and failures, one of which is the collapse of TerraUSD.

In its approach to the stablecoin space, Ethena has adopted a unique approach designed to ensure its USDe stablecoin maintains its peg. The startup employs a novel technique where it uses collateral from Ethereum derivatives. By employing perpetual swaps and a price hedging mechanism, the platform allows for the shorting of Ether and thus able to keep the USDe value stable. Maintaining that dollar parity is the key to greater adoption of the ETH-backed stablecoin.

Ethena also offers a savings bond that generates yield via staked ETH. In this case, users can deposit collateral in the form of USD, ETH, or some liquid staking tokens and use that to mint USDe and generate yield with liquid staking derivatives (LSD).

They are features that could strengthen Ethena’s position in the LSDFi sector of the wider decentralised finance (DeFi) industry. LSDFi unlocks new yield opportunities for LSD tokens.

The post Ethereum stablecoin developer Ethena secures $6 million funding appeared first on Invezz.

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