CryptoQuant CEO Ki Young Ju has voiced concerns about Ethena’s recent decision to incorporate Bitcoin as a backing asset for its USDe synthetic dollar.
On April 4, Ethena Labs revealed plans to onboard BTC as a backing asset for USDe to create a safer product for its users. The firm said:
“After the unprecedented growth or USDe since launch, Ethena hedges represent ~20% of ETH open interest as of today. With $25 billion of BTC open interest readily available for Ethena to delta hedge, the capacity for USDe to scale has increased >2.5x.”
USDe is a fast-rising “stablecoin” that has attracted significant community attention due to its high annual yield of 37%. Notably, its market capitalization has crossed the $2 billion mark and it has scored adoption from major DeFi projects like MakerDAO.
Community concerns
However, Ju was concerned that Ethena’s BTC decision poses “potential contagion risks” for Bitcoin holders while drawing parallels with Terra Luna’s inclusion o
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