In the past few days, the cooperation proposal between Ethena and Spark may boost the third largest stablecoin on the USDe site. The author would like to briefly analyze this proposal through this article.
What is Spark?
Spark is a lending subDAO under Sky (formerly MakerDAO) that focuses on stablecoin liquidity. It currently manages up to US$6.2 billion in stablecoin liquidity.
What impact does the proposal have on Spark?
According to the proposal documents, in the past, Spark mainly obtained USDe exposure through Morpho lending. Due to risk management considerations, the proportion of exposure was relatively small.
Through this direct collaboration with Ethena, Spark will benefit from:
Achieve better yield (related to sUSDe)
Risk becomes more controllable (Ethena will provide a redemption period shorter than seven days)
Higher operational capability (USDC can be directly deployed to USDe and sUSDe through the Ethena contract)
What impact does the proposal have on Ethena?
A liquidity injection of up to $1.1 billion will be obtained into USDe and sUSDe (currently, the market cap of USDe is $5.8 billion)
The added liquidity will provide Ethena with more operational space, beneficial for earning returns
The new liquidity will help boost the market cap of USDe further, potentially surpassing the third-largest stablecoin DAI
Summary
Although this collaboration has a relatively small direct relevance for retail participants (lower correlation with ENA coin price and airdrop), most users participate in the Ethena ecosystem through the stablecoins USDe and sUSDe. Therefore, understanding Ethena's overall development and the current situation of stablecoin USDe is still very important.
After all, no one wants to experience another stablecoin protocol collapse or stablecoin price decoupling!
These collaborations repeatedly show that Ethena is gradually becoming a foundational element in the multi-chain market, which also reduces the likelihood of USDe encountering extreme problems. For us retail investors, it increases our confidence in holding USDe securely.
As a side note, after tracking Ethena's dynamics recently, I sincerely feel that this team has strong capabilities in business model operation and improvement. From my experience in startup incubation, my level of trust in Ethena has increased significantly, and I will continue to follow its updates (I think it is a very good business case). Interested partners are welcome to follow and discuss together!
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※ Partners who want to participate in the Ethena Q3 ENA airdrop can use my code:
eu54u
※ The above content does not constitute investment advice. Users should operate according to their own risk tolerance, and DYOR carefully participate in the investment market.
※ The attached image is from Spark Mirror