As a seasoned investor with a background in both traditional finance and crypto, I find Ethena’s new product, iUSDe, quite intriguing. With my years of experience navigating the complexities of TradFi and the volatile crypto market, I can see how this product could potentially bridge the gap between these two worlds.
The idea of a yield-bearing synthetic dollar, especially considering the size of the fixed-income markets, could indeed disrupt the traditional finance landscape. If successful, it has the potential to attract significant attention from TradFi participants, possibly generating demand that is “several orders of magnitude larger than the entire crypto market combined, including Bitcoin.”
However, as with any investment, there are risks involved. The synthetic dollar’s reliance on staking returns and shorting Ether perpetual futures contracts could potentially introduce volatility. But then again, isn’t that what makes investing exciting?
In a humorous note, I can’t help but think of the irony: TradFi institutions entering crypto, and they do so with a dollar-based product! If this trend continues, who knows, we might see them launching a “BTC savings account” next! After all, in the world of finance, everything is dollar and cents… or should I say, Ether and sUSDe?
Ethena is gearing up to launch a fresh cryptocurrency-focused service, with the intention of captivating conventional financial organizations.
The blockchain platform is set to debut the innovative iUSDe product in February, as outlined in their 2025 roadmap published on January 3. This new product, based on their synthetic dollar (sUSDe), includes a “restricted transfer contract” at the token level for easier handling.
In the first three months of 2025, Ethena aims to team up with established TradFi distribution partners to broaden access to iUSDe for their customers. By the last day of January, they intend to officially unveil these collaborative partners.
“The singular focus for Q1 2025 will be working with traditional finance distribution partners to enable their clients to access iUSDe.”
The primary group intended for this product are asset managers, private credit investors, exchange-listed investment products, private investment entities, and brokerage services catering to high-end clients (prime brokers).
In simple terms, Ethena’s sUSDe program provides an annual return of 10%, according to their data, to more than 368,000 investors who collectively put in over $5.85 billion into this synthetic dollar investment.
Synthetic dollar could disrupt TradFi markets
In simpler terms, a yield-generating artificial dollar may draw substantial interest from traditional finance (TradFi) investors, given that the fixed-income markets, amounting to around $190 trillion, represent the largest liquid investment category globally.
As a researcher delving into financial markets, I’ve come across intriguing predictions in Ethena’s roadmap. They suggest that the appeal of a dollar-based product capable of yield generation could potentially spark demand on a scale vastly exceeding the current entire crypto market, even encompassing Bitcoin.
“And that is why the next logical step for these entities following the ETFs is a dollar savings product. The futures basis is the only market large enough in crypto with the capacity for their level of demand in a dollar format.”
In a unique interview with CryptoMoon, Guy Young, founder of Ethena Labs, revealed that the synthetic dollar used by Ethena yields returns through staking rewards and the shorting of Ether (ETH) continuous future contracts.
Ethena the second-fastest protocol to hit $100 million in revenue
In cryptocurrency history, Ethena became the second-swiftest to reach the $100 million income landmark after its introduction.
In contrast to Ethena, who achieved their initial $100 million in revenue after 251 days, memecoin launchpad Pump.fun managed to reach this mark in a quicker span of 217 days.
In a span of only ten months, USDe has rapidly gained popularity, making it the third most widely used US dollar-backed cryptocurrency, trailing behind Circle’s US Dollar Coin (USDC) and Tether’s USD Tether (USDT), which are currently the market leaders in this stablecoin category.
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2025-01-03 17:47