The move is intended to help the delta-hedged synthetic dollar scale by accessing the Bitcoin futures market.
Ethena Labs is adding Bitcoin as a collateral asset for its USDe synthetic dollar as a strategic step to enhance scalability.
USDe has grown rapidly since launching an airdrop campaign earlier this year, with its total value locked (TVL) now approaching $2 billion. This has resulted in Ethena’s short futures positions, which are used to hedge the protocol’s ETH exposure, ballooning to 20% of total Ether open interest, according to the project.
Ethena aims to tap into the substantial liquidity and increased scaling potential offered by BTC derivative markets, estimating that the move could enable it to scale USDe by 250%.
The project’s newly launched ENA token is trading at around $1, giving it a market capitalization of $1.5 billion.
The team noted that while BTC does not offer a native staking yield like ETH, it compensates with its superior liquidity and duration profile. Additionally, in a bull market where funding rates exceed 30%, staking yields become less significant.
By adding BTC as a backing asset, Ethena expects to bolster the scalability and overall stability of USDe. The BTC integration will be reflected in Ethena’s dashboards starting tomorrow.
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