#新币挖矿 Ethena was directly listed on Binance LaunchPool, which made me rethink Ethena. I re-read the documents and continued to take notes to review the history of stablecoins, learn from the past and look to the future to see what results Ethena will have in this bull market.
1. The path of exploration of Crypto stable currency
Stablecoin has always been a business that everyone in the industry is keen on. In 2014, Bitfinex first took out the USDT killer weapon. After two accelerations in the ICO era and the summer of DeFi, it already dominates 70%+ of the stablecoin market in the currency circle.
But everyone may think that this operation of putting 1 US dollar in the bank to mint 1 US dollar USDT is too uncrypto. They have been trying to realize the decentralized stable currency. The over-collateralized stable currency $DAI launched by MakerDAO at the end of 2017 can be said to be a real One of the successful attempts, it is not only the first DAO organization, but also has become TVL’s number one DeFi product. Founder @RuneKek also announced in July 21 that the Maker Foundation will be disbanded and MakerDAO will achieve autonomy.
2. Exploration of algorithmic stablecoins
However, greed for capital efficiency has led everyone to pursue more radical algorithmic stablecoins, but the results are unsatisfactory. Few stablecoin protocols can withstand the test of cycles and the panic selling pressure of declines.
A typical example is Fei, a star project that "debuted and peaked" in 2021. With the aura of A16z and Coinbase, it collected 640,000 ETH, but because it violated the laws of the natural market, it trapped all the founding participants in a "water prison". middle.
The second is the Korean gangster Luna and UST's Tiyunzong. It is too painful for the author to go into details.
3. The new paradigm of stablecoins for CeFi arbitrage
Looking ahead, when Ethena was introduced on the 22nd, it only had a TVL of 300 million. Now it has become the fifth largest stablecoin with a TVL of 1.5 billion. It is also the second largest decentralized stablecoin after the three US dollar reserve stablecoins $USDC $USDT $FDUSD. Even @RuneKek deposited 5.66 million USDT yesterday.
Such rapid TVL growth is due to airdrop expectations and innovative stablecoin arbitrage models. At the same time, the following two major factors are also key to the development of USDe:
Timing: As mentioned in the last issue, the source of Ethena’s income is the permanent funding rate from centralized exchanges. The key factor in keeping this rate attractive is the time cycle. Only the bull market can have such a high rate. Funding rate income, there is a good launch opportunity.
Financing institutions: As stablecoins, the top two stablecoins by market capitalization also use the liquidity and application advantages of CEX (Coinbase & Bitfinex) to quickly occupy the market. Ethena's path as a decentralized stablecoin also requires the support of major exchanges and market makers. Therefore, in addition to the "guide" Arthur Hayes leading the investment, you can see many CEX and market makers among investment institutions. Businessman appears.
4. Risks behind high returns
USDe has given appropriate explanations and solutions to several issues that everyone is currently concerned about, and ultimately there is an Ethena reserve to back them up.
1. Solutions for the period of negative funding rates - First of all, the conclusion given by the founder: stETH yield % +/- rate % has not been negative in any quarter in three years.
Secondly, negative funding rates lead to ➡ lower protocol revenue ➡ users canceling minting ➡ protocol short positions closing ➡ negative rate reduction will also reduce rate risk.
2. Exchange failure: Ethena manages assets through an over-the-counter settlement provider (which runs a settlement cycle every 4 hours). Ethena does not deposit collateral to any exchange, which reduces the risk of thunderstorms on the exchange. .
3. The risk of liquidation, according to the Ethena document, is only when the price difference deviates from 65% in extreme circumstances (the historical maximum is 8%). Only then did Ethena’s positions begin to be gradually liquidated, resulting in actual losses.
4. It is about the scale limit of Ethena. On Ethena's RoadMap, BTC and Solana's mortgage will also be launched in Q2 Q3. Obviously, Ethena has slowed down its pace and chosen to develop its own currency scale step by step, while conducting more exploration of the availability of USDe.
5. Price expectations?
The current price estimate for $ENA in the pre-launch market is between 0.6-0.7. Unfortunately, I have not found any token functions of $ENA other than governance voting.
Given that the new coins launched on Binance’s LaunchPool recently have performed better than the last, I think it would be a good choice to buy at the bottom and hold for a while after the launch.
