Ethena Labs, the team behind USDe, has incorporated Bitcoin (BTC) as collateral into its synthetic dollar-pegged product, aiming to enhance security and reliability for USDe tokenholders.
Despite USDe already being backed by Ether, Ether-based liquid staking tokens, and Tether, Ethena believes that integrating Bitcoin will offer a safer and more robust solution.
The addition of Bitcoin as collateral is expected to enable USDe to scale significantly from its current $2 billion supply. Ethena pointed out that with Bitcoin’s open interest rising from $10 billion to $25 million over the past year on major cryptocurrency exchanges, USDe has the potential to scale by a factor of 2.5. This move aligns with Ethena’s goal of expanding the utility and adoption of USDe.
USDe was launched on Ethereum on Feb. 19, and initially, Ethena promised a substantial annual percentage yield (APY) of 27.6% on staked USDe, which raised concerns within the community. Despite reaching an APY peak of 113% on March 5, it has since decreased to 7.15%.
Excited to announce that Ethena has onboarded BTC as a backing asset to USDe
This is a crucial unlock which will enable USDe to scale significantly from the current $2bn supply pic.twitter.com/FOZRWBrVZV
— Ethena Labs (@ethena_labs) April 4, 2024
Ethena said Bitcoin would provide better liquidity and offer a more “safe” and “robust” product for USDe token holders.
“BTC derivative markets are growing at a faster pace than ETH and offer better scalability and liquidity for delta hedging.”
For instance, Ethena may hold short positions in Ether (ETH) or Ether-based derivatives, which become profitable when Ether’s price declines. Consequently, Ethena can mitigate a significant portion of downward volatility in USDe’s collateral.
Before incorporating Bitcoin, USDe was backed by ETH, Tether (USDT), and Ether-based liquid staking tokens in proportions of 45%, 38%, and 17%, respectively.
The majority of its collateral is obtained from Binance, Bybit, and OKX, accounting for 59%, 15%, and 20% respectively. The remaining 6% is sourced from Deribit, Bitget, and BitMEX.
While Bitcoin does not offer a native staking yield like staked Ether, Ethena noted that staking yields of 3%–4% are relatively insignificant during bull markets when funding rates can exceed 30%.
Ethena aims to distinguish its synthetic dollar product from stablecoins by reducing reliance on the traditional banking system or eliminating it altogether.
Currently, USDe ranks fifth in market capitalization among United States dollar-denominated products, according to CoinGecko.
With a market cap of $2 billion, it follows USDT, USD Coin (USDC), Dai (DAI), and First Digital USD (FDUSD).
Dogecoiners clone hyped Bitcoin Ordinals ‘Runestone’ airdrop
The Doginal-based Runestones were distributed without charge, same to the Bitcoin Ordinals version.
The “Runestone” airdrop, which was inspired by last month’s nonfungible token (NFT) giveaway conducted through Bitcoin Ordinals, was just completed by Dogecoin blockchain natives.
30,272 of the creatively named “Doge Runestone” Doginals—Dogecoin’s term for its Ordinals—were distributed to wallets holding at least one Doginal from a list of collections provided by Robo AI, the airdrop organizer, before the end of April 2.
According to statistics from the Ordinals Wallet marketplace, the Doge Runestones are currently trading at price of 185 Dogecoin, worth about $32. They have witnessed a 24-hour volume of little over $2,000 as well.
The runestone airdrop, which was inspired by the popular Runestone airdrop based on Bitcoin Ordinals in March and distributed over 112,000 Runestones to early users of the network, was imitated in this one.
Bitcoin Ordinals are assets contained in sats, the smallest unit of currency, that resemble NFTs like pictures or papers.
Because Dogecoin is a fork of a fork of Bitcoin, it may support Ordinals. An anonymous developer introduced Dogecoin’s Doginals protocol in February of last year, one month after Bitcoin Ordinals.
The protocol also made it possible for the DRC-20 token standard, which will be named after both the BRC-20 standard used by Bitcoin and the ERC-20 standard used by Ethereum, to be introduced in early May of 2023.
Doginal Explorer data shows that there are 149 Doginal collections and around 68,000 DRC-20 tokens with a $120 million total market value.
Another notable addition to the Dogecoin blockchain is the 1993 iconic shooter game Doom, which is part of a persistent meme about video game porters running Doom on impromptu hardware like toothbrushes and washing machines.
DOGE has decreased 21% over the last few days, is this the best time to buy?
The price of Dogecoin (DOGE) has seen a significant 21% decrease over the last few days.
Time to Accumulate Dogecoin
Even with the recent decline in its market value, Dogecoin is now in a favorable position for holding. According to the Market Value to Realized Value (MVRV) ratio, which evaluates investors’ profit or loss position, DOGE is a good investment.
Dogecoin’s 7-day MVRV ratio is at -7.55%, which means that a large number of holders are experiencing a loss—a state that often comes before a period of recovery. When the MVRV ratio is between -5% and -15%, investors are likely to see a comeback for DOGE, indicating that this is an opportunity zone.
In addition, around 6.8 billion DOGE, which is valued at over $1.2 billion, was acquired between $0.171 and $0.187 and is about to turn a profit.
Investor confidence is rising as the price of DOGE approaches the upper end of this range. This may promote holding rather than selling, thereby maintaining the upward trend.
Bullish DOGE price prediction
The current trading price of DOGE, at $0.182, is eerily near to breaking over the critical $0.182 support level. If this level is effectively used as support, a DOGE rally toward $0.200 may be sparked.
If DOGE is successful in establishing $0.200 as a new support level, it may go on to $0.220, which would be a new high for the year.
Read more: CRYPTO MARKET REVIEW IN 2023 AND NARRATIVES IN 2024