Ethena Secures $100 Million for New Synthetic Stablecoin Initiative
Ethena, the innovative developer behind the synthetic stablecoin known as USDe, has successfully raised $100 million to fund the creation of a new token specifically designed for traditional financial (TradFi) institutions. This significant funding round was reported by Bloomberg on Monday and was finalized in December. Notable investors in this venture include Franklin Templeton and F-Prime Capital, an arm of Fidelity Investments, according to sources familiar with the discussions.
The founder of Ethena, Guy Young, outlined the company’s ambitions in a blog post earlier this January. He revealed plans to launch iUSDe, a token that aims to cater to the unique needs and regulations of regulated financial institutions. Unlike conventional stablecoins, USDe is classified as a synthetic stablecoin; it does not maintain a 1:1 backing with fiat currency. Instead, it achieves its stable value by collaterizing stablecoins and engaging in futures positions with significant open interest.
This innovative approach has propelled USDe’s market capitalization to approximately $6 billion this month, solidifying its position as the third-largest stablecoin in the market. It now trails behind Tether’s USDT, which commands a valuation of $142 billion, and Circle’s USDC, valued at $57 billion.
Market analysts are beginning to view USDe as a potential safe haven asset during times of heightened volatility in the broader cryptocurrency landscape. Arthur Hayes, the chief investment officer of Maelstrom, has noted that his digital asset fund has significantly increased its holdings in USDe, reaching record levels of investment. He stated, “We will be positioned with copious amounts of dry powder ready to buy the dip on Bitcoin,” also highlighting his role as both an investor in and advisor to Ethena.
As of now, Ethena has not provided a comment to CoinDesk regarding the recent $100 million funding round.
