$USDE Let's have a brief chat about USDe. Binance has launched USDe, and the next step might be USDe wealth management, after all, the biggest selling point of USDe lies in the neutral strategy returns. It can be considered as filling the last gap of Binance's stablecoin.
Currently, the stablecoin wealth management returns in Binance mainly come from two sources: 1. Lending 2. Government bonds.
In fact, there is also an arbitrage strategy return, which is commonly referred to as a neutral strategy in the financial field, essentially meaning hedging. For example, the essence of ethena's USDe is funding rate arbitrage, and then this arbitrage return is distributed to USDe stakers. Looking at Binance's robot strategies, it is evident that there is currently almost a 10% annualized return in this market. Because for most of the year, the funding rate is mostly positive, one can buy BTC spot while shorting the same position in BTC, thus hedging against the risks of price fluctuations while earning contract funding fees. Calculating based on a standard fee rate of 0.01% gives approximately 10% annualized returns. If the market is good, the funding rate could be even higher; I've seen it reach as high as 20% several times.
However, conventional fee arbitrage has a high entry barrier, not everyone can play it, and it requires a sustained period to cover transaction fees and other costs to make a profit. Moreover, if the negative funding rate kicks in, it would take even longer to see returns while needing to control the risk of liquidation. But after USDe’s liquidity staking, it can be redeemed at any time, and it can also automatically accumulate compound returns through sUSDe. Additionally, besides funding rates, ethena also buys government bonds and engages in other staking, so the sources of returns are quite diverse and can flexibly adjust strategies based on market conditions. This is also why many Western KOLs highly promote ethena. In the future, as the Federal Reserve further lowers interest rates, the dollar returns in web2 are becoming increasingly low, while on-chain stablecoin returns could become more attractive. Who knows, we might see a wave of deposit migration?
Currently, the stablecoin wealth management returns in Binance mainly come from two sources: 1. Lending 2. Government bonds.
In fact, there is also an arbitrage strategy return, which is commonly referred to as a neutral strategy in the financial field, essentially meaning hedging. For example, the essence of ethena's USDe is funding rate arbitrage, and then this arbitrage return is distributed to USDe stakers. Looking at Binance's robot strategies, it is evident that there is currently almost a 10% annualized return in this market. Because for most of the year, the funding rate is mostly positive, one can buy BTC spot while shorting the same position in BTC, thus hedging against the risks of price fluctuations while earning contract funding fees. Calculating based on a standard fee rate of 0.01% gives approximately 10% annualized returns. If the market is good, the funding rate could be even higher; I've seen it reach as high as 20% several times.
However, conventional fee arbitrage has a high entry barrier, not everyone can play it, and it requires a sustained period to cover transaction fees and other costs to make a profit. Moreover, if the negative funding rate kicks in, it would take even longer to see returns while needing to control the risk of liquidation. But after USDe’s liquidity staking, it can be redeemed at any time, and it can also automatically accumulate compound returns through sUSDe. Additionally, besides funding rates, ethena also buys government bonds and engages in other staking, so the sources of returns are quite diverse and can flexibly adjust strategies based on market conditions. This is also why many Western KOLs highly promote ethena. In the future, as the Federal Reserve further lowers interest rates, the dollar returns in web2 are becoming increasingly low, while on-chain stablecoin returns could become more attractive. Who knows, we might see a wave of deposit migration?
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