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Ethena Raises $100 Million to Develop Token for Traditional Financial Institutions
Introduction
Ethena, the developer of the synthetic stablecoin USDe, has raised $100 million to finance a new token targeted at traditional financial (TradFi) institutions. The funding round was completed in December, with Franklin Templeton and Fidelity Investments-affiliated F-Prime Capital among the backers, according to a person familiar with the matter.
About USDe
USDe is a synthetic stablecoin that differs from other tokens in that it is not backed 1:1 by fiat assets. Instead, it maintains its peg by collateralizing stablecoins and taking futures positions with large open interest. The token’s market cap has jumped to around $6 billion this month, making it the third largest stablecoin behind Tether’s USDT and Circle’s USDC, which are worth $142 billion and $57 billion respectively.
Market Performance
Some observers see USDe as a potential safe haven during periods of greater volatility in the wider crypto market. Arthur Hayes, chief investment officer of Maelstrom, has said that the digital asset fund has raised its exposure to USDe "to record levels." "We will be positioned with copious amounts of dry powder ready to buy the dip on Bitcoin," Hayes, who is an investor in and an advisor to Ethena, added.
Funding and Future Plans
Ethena plans to roll out a new token, iUSDe, tailored to regulated financial institutions. The token will be designed to provide a more stable and secure investment opportunity for institutions looking to invest in the digital asset market. The funding will be used to support the development of iUSDe and to build a team to market and distribute the token to institutional investors.
Conclusion
Ethena’s $100 million funding round is a significant milestone in the development of the digital asset market. The company’s plans to roll out a new token, iUSDe, targeted at traditional financial institutions, has the potential to bring more mainstream investors into the market. The success of USDe, with its market cap of around $6 billion, is a testament to the growing popularity of synthetic stablecoins and the potential for institutional investors to participate in the digital asset market.
FAQs
Q: What is USDe?
A: USDe is a synthetic stablecoin that maintains its peg by collateralizing stablecoins and taking futures positions with large open interest.
Q: What is iUSDe?
A: iUSDe is a new token planned by Ethena, tailored to regulated financial institutions, designed to provide a more stable and secure investment opportunity for institutions looking to invest in the digital asset market.
Q: Who are the backers of Ethena’s funding round?
A: The funding round was backed by Franklin Templeton and Fidelity Investments-affiliated F-Prime Capital.
Q: What is the market cap of USDe?
A: The market cap of USDe is around $6 billion, making it the third largest stablecoin behind Tether’s USDT and Circle’s USDC.
