Stablecoin New Face! Cross-chain order book Elixir introduces stablecoin deUSD to pair with Ethena

The modular liquidity protocol Elixir has recently launched a stablecoin called deUSD, which will serve as the preferred collateral within the Elixir ecosystem. The official statement mentions that most DEXs partnering with Elixir will utilize deUSD. Its mechanism is similar to Ethena, where users deposit stETH and sDAI, while simultaneously shorting ETH on exchanges to earn funding rates. Currently, Sei's official stablecoin fastUSD is fully collateralized by deUSD, and Elixir is set to launch its mainnet on October 31st. Staking deUSD will yield Elixir double points rewards, while Curve LP will enjoy a 10x bonus.

An $800 Million Valuation Liquidity Protocol, Arthur Hayes, Hack VC, Mysten Labs Lead Investment

Elixir founder Philip Forte is a partner at BlockVenture Coalition, and COO Cole Petersen previously worked at the company. The team's CTO, Christopher Gilbert, was a lead engineer at Tokensoft.

Elixir, backed by Hack VC, the well-known Arthur Hayes family office, and Sui team Mysten Labs, has reached a valuation of $800 million after a recent funding round. The protocol is primarily a multi-chain modular liquidity protocol that collaborates with DEXs. In Elixir, staking is equivalent to betting against derivative traders on DEX.

If Funding Rates Turn Negative, Profit Source for deUSD Will Be sDAI

deUSD is minted by staking stETH and sDAI, and the protocol will short an equivalent amount of ETH to earn funding rates. Even if the funding rate is negative, deUSD still has room for profit because deUSD will shift to participation in relatively stable income protocols like Sky Protocol.

The over-collateralized fund (OCF) of deUSD is the core of the system. By monitoring the operation of OCF, deUSD will shift to sDAI of Sky Protocol in the case of negative rates. sDAI provides a mix of Sky Protocol fee sharing and U.S. Treasury bond income, ensuring that deUSD holders can still earn profits and receive support under any market conditions. This is the key difference between deUSD and similar protocols like Ethena.

When OCF is about 20% remaining, deUSD's collateral assets will be entirely in sDAI. 30% of deUSD profits are used to fund OCF, and this ratio is expected to decrease as the scale of OCF expands.

Goal to Achieve Full Decentralization, deUSD Already Serves as Sei Stablecoin Asset Reserve

Currently, deUSD arbitrage is still on centralized exchanges. Once DEXs have enough liquidity, Elixir will move the entire mechanism to DEX. Elixir is already applied in DeFi protocols such as Vertex, RabbitX, BlueFin, and Orderly. Next, it will collaborate with DEXs like dYdX, ApeX, Hyperliquid, Synthetix, SynFutures, and Aevo.

The public chain Sei's recent launch of fastUSD uses deUSD as the asset reserve. Currently, deUSD can be found in trading pairs with other stablecoins on three major DeFi protocols: Uniswap, PancakeSwap, and Curve.

On October 31, Elixir will launch its mainnet, and in the next 10 months, Elixir will distribute 750 million Elixir potion points to users. Staking deUSD will earn double points, while Curve LP will earn ten times. Users can currently participate in Elixir through staking.