Stablecoin USDe issuer Ethena secures additional funding led by Dragonfly Capital and Arthur Hayes

Recently, stablecoin issuer Ethena, which focuses on developing stablecoins without relying on traditional finance, has raised an additional $14 million. The funding round was led by Dragonfly Capital and Arthur Hayes' family office Malestrom, with investors including Binance Labs, Deribit, Bybit, OKX, Gemini, Kraken, and traditional finance player Franklin Templeton.

No Need to Rely on Traditional Finance for Stablecoin USDe

Currently, mainstream stablecoins like USDC and USDT are mainly backed by fiat assets such as U.S. Treasury bonds to ensure their peg to fiat currencies. While most investors consider this method safer, it still relies on the traditional financial system to operate.

On the other hand, the stablecoin USDe developed by Ethena uses users' collateral ETH to hedge price risks and maintains its peg to the U.S. dollar through perpetual contract shorts, ensuring that profits or losses from any asset are offset against each other through Delta hedging.

However, this does not mean that USDe is without risks. Liquidity and counterparty risks always arise in times of market pressure and unexpected events. To mitigate such risks, Ethena claims that its collateral is held and settled by institutional-grade companies like Fireblocks, Copper, and Bitgo.

Founder of Ethena, Guy Young, stated:

In the world of cryptocurrencies, you are trying to create a parallel financial system, but the most critical financial tool, stablecoins, is completely tied to the existing system. And we are trying to create something that exists outside the banking system.

According to their website, USDe currently has a market value of 280 million USD with 3,450 users and an annualized return rate of 27.6%.

Stablecoins Are a Blue Ocean Market with Few Competitors

Silicon Valley accelerator Y Combinator also mentioned stablecoins in its latest startup report, stating that the stablecoin sector is a future trend with very few current competitors. They anticipate seeing more stablecoin projects emerge and become mainstream in the future.

Y Combinator: Stablecoins Have Unique Advantages and Are Still a Blue Ocean

According to data from CoinGecko, the total market capitalization of stablecoins is 139 billion USD, with seventy percent concentrated in the top-ranked USDT. The market capitalization of the top five stablecoins is as follows:

• USDT: 97.7 billion USD
• USDC: 28.1 billion USD
• DAI: 5 billion USD
• FDUSD: 2.8 billion USD
• TUSD: 1.3 billion USD