kizoki _Yz

In the crypto world, the term “stablecoin” no longer guarantees safety. Especially after the historic collapse of UST, the algorithmic stablecoin from the Terra/LUNA project, every new stablecoin is now viewed with caution and skepticism.
Today, the spotlight is on a new project: USDe by Ethena. It promises a new, more sustainable model for stability, but it raises an important question: is this just UST rebranded with a new mechanism? And could it collapse in a similar way?
To answer this, let’s first revisit what happened with UST.

🔥 The UST Story: Ambition Turned Catastrophe

In 2021, UST became one of the most popular stablecoins, mainly because of the high yields offered through the Anchor Protocol, which gave users up to 20% annual returns simply for holding UST.

But the system behind UST wasn’t backed by real dollars or assets. Instead, it relied on an algorithmic balance between UST and LUNA. When trust began to fade and users rushed to withdraw funds, the mechanism failed. UST lost its peg, and the system started minting massive amounts of LUNA in an attempt to restore balance — which led to total hyperinflation and the collapse of both tokens.
Billions were lost, and it became one of the biggest failures in crypto history.

⚙️ What Is Ethena Offering? Is USDe Really Different?
Ethena has launched a new type of stablecoin called USDe, which markets itself as a synthetic stablecoin. It’s not backed by cash reserves but instead uses a financial strategy known as Delta-Neutral Hedging.
Here’s the simplified idea:
• Ethena accepts crypto assets like Ethereum or Bitcoin as collateral.
• At the same time, it opens short positions on those assets using perpetual futures contracts.
• When the crypto prices go up or down, the gains/losses in the short positions are meant to balance the overall exposure and keep the value of USDe around $1.

It’s a clever use of market tools to maintain a stable value — theoretically. But like any complex system, it carries risks.
⚠️ The Hidden Dangers of USDe

While USDe isn’t purely algorithmic like UST, it still comes with serious concerns:
1. Reliance on Derivatives Markets: Ethena’s entire stability model depends on futures markets. High volatility or low liquidity can break the hedge.
2. Attractive Yields Create Risky Incentives: Ethena offers high APY through a product called sUSDe, which is eerily similar to what Anchor offered with UST — creating a cycle of user dependency on unsustainable returns.

3. No Real Dollar Reserves: Like UST, USDe isn’t backed 1:1 with fiat. If there’s a sudden sell-off or panic, there may not be enough backing to support redemptions.
4. Trust Is Fragile: Once people start questioning the peg — even slightly — panic can spread quickly. As seen with UST, market confidence is more powerful than math.

🧠 Lessons from the Past Must Be Remembered
When a stablecoin fails, it’s not just financial capital that disappears — it’s trust. UST proved that high yields without solid fundamentals are often traps disguised as innovation.
With USDe, Ethena is using a technically different model, but it still shares some dangerous similarities:
• Overreliance on trading strategies.
• A lack of physical or fiat reserves.

• Promises of high returns to attract users.
These are red flags that shouldn’t be ignored just because the packaging looks smarter or more modern.

✅ Conclusion: Is USDe Safe?
There’s no simple answer. USDe is not a copy of UST — it uses more advanced and theoretically safer tools — but it still operates in a risky space. Without tangible reserves and with exposure to market-based strategies, there’s always the possibility of failure under extreme conditions.
The most important lesson?
In crypto, if something sounds too good to be true… it probably isn’t stable
$ENA