{"id":17786,"date":"2024-04-12T08:15:49","date_gmt":"2024-04-12T08:15:49","guid":{"rendered":"https:\/\/coinengineer.io\/blog\/?p=17786"},"modified":"2024-04-12T06:51:22","modified_gmt":"2024-04-12T06:51:22","slug":"ethenas-usde-caused-controversy-in-its-yield-plan","status":"publish","type":"post","link":"https:\/\/coinengineer.net\/blog\/ethenas-usde-caused-controversy-in-its-yield-plan\/","title":{"rendered":"Ethena’s USDe Caused Controversy in Its Yield Plan"},"content":{"rendered":"

Ethena<\/a> Labs’ USDe stablecoin has sparked debates among crypto enthusiasts, reminiscent of the Terra ecosystem’s tumultuous past, with opinions split on its high-yield proposition.<\/p>\n

CEO of Folkvang, Mike van Rossum, expressed caution about Ethena<\/a>‘s yield-generation strategy, noting, “A lot of things can go wrong.”<\/p>\n

The USDe stablecoin offers a yield mechanism through a tokenized cash-and-carry trade, but it faces challenges such as counterparty risk and potential funding rate reversals.<\/p>\n

Guy Young, the founder of Ethena, dismissed comparisons to Terra’s failed UST as a “weak, surface-level argument.”<\/p>\n

Since its public introduction in February, Ethena Labs has seen a surge in interest, with its total value locked (TVL) skyrocketing from $178 million to $2.3 billion in just 60 days. However, the allure of a high annualized yield of around 37% raises concerns, reminiscent of the situation with Terra’s UST before its collapse.<\/p>\n

Unlike traditional stablecoins like USDT and USDC, which are backed by assets like dollars or government debt, USDe positions itself as a synthetic stablecoin. Its value of $1 is maintained through a financial technique called the cash-and-carry trade, a method well-known in finance circles.<\/p>\n

Mike van Rossum emphasized the safety of the trade itself but cautioned about potential risks associated with exchange issues and executing large trades in volatile markets.<\/p>\n

Ethena Labs’ USDe stablecoin continues to draw attention, but the community remains divided over its high-yield strategy and the echoes of Terra’s past troubles.<\/p>\n

\n

You can also freely share your thoughts and comments about the topic in the comment section. Additionally, don\u2019t forget to follow us on our\u00a0Telegram,\u00a0<\/strong><\/a>YouTube<\/strong><\/a>,\u00a0and\u00a0Twitter<\/strong><\/a>\u00a0channels for the latest news and updates.<\/em><\/p>\n","protected":false},"excerpt":{"rendered":"

Ethena Labs’ USDe stablecoin has sparked debates among crypto enthusiasts, reminiscent of the Terra ecosystem’s tumultuous past, with opinions split on its high-yield proposition. CEO of Folkvang, Mike van Rossum, expressed caution about Ethena‘s yield-generation strategy, noting, “A lot of things can go wrong.” The USDe stablecoin offers a yield mechanism through a tokenized cash-and-carry<\/p>\n","protected":false},"author":6,"featured_media":17519,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[9,2],"tags":[5165,5320],"class_list":["post-17786","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-crypto-news","category-news","tag-ethena","tag-ethena-usde"],"yoast_head":"\nEthena's USDe Caused Controversy in Its Yield Plan - Coin Engineer<\/title>\n<meta name=\"description\" content=\"Ethena Labs' USDe stablecoin has sparked debates among crypto enthusiasts, reminiscent of the Terra ecosystem's tumultuous past, with opinions split on its high-yield proposition.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/coinengineer.net\/blog\/ethenas-usde-caused-controversy-in-its-yield-plan\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Ethena's USDe Caused Controversy in Its Yield Plan - 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