Ethena, a decentralized finance (DeFi) protocol on the Ethereum network, is attracting a lot of attention in the crypto world with its synthetic US dollar, USDe. The protocol’s governance token, ENA, recently rose 8% following news that crypto exchange Bybit is integrating USDe for various trading activities.
This increases the usefulness of the token and forms a bridge between CeFi (centralized finance) and DeFi.
Bybit integrates USDe
Bybit has added USDe as collateral for perpetual futures trading and is creating spot trading pairs in BTC and ETH against the token. Joshua Lim, co-founder of derivatives trader Arbelos, sees this as a further strengthening of the bridge between CeFi and DeFi. Furthermore, the risks for perpetual traders would be reduced as the token has a built-in short position.
Ethena’s yield-generating investment offering has already attracted more than $2 billion. Yet there is also criticism. In the wake of the crypto market, market observers remain wary of the risks associated with such high returns. USDe is a structured financial product. It uses a combination of staked ETH and short ETH perpetual futures positions to maintain its peg to the US dollar.
Altcoin season? Possible 100x for Ethena!
As the crypto market recovers, some researchers expect an altcoin season in which certain altcoins could see significant growth. Alex Wacy, a well-known crypto researcherthinks that about 15% of altcoins can deliver returns of 10x to 100x.
He names Ethena as a potential winner, citing the synthetic dollar protocol as a crypto-native alternative to traditional banking. He also notes that the next unlocking event for ENA is scheduled for April 2025. Wacy sees a pattern on the weekly chart that often precedes significant growth.
Expansion of the Ethena ecosystem
Ethena Labs, the developer of the synthetic dollar protocol, is actively expanding the ecosystem by collaborating with other DeFi projects. For example, a USDeFRAX liquidity pool was recently approved in collaboration with Frax Finance, to diversify the returns of the FRAX stablecoin.
This further strengthens the ecosystem around Ethena.
