“Stablecoin Issuer Ethena Secures Additional Funding Led by Dragonfly Capital and Arthur Hayes”
Ethena, a stablecoin issuer focused on developing stablecoins that do not rely on traditional finance, has recently raised $14 million in funding. The funding round was led by Dragonfly Capital and Malestrom, the family office of Arthur Hayes. Other investors include Binance Labs, Deribit, Bybit, OKX, Gemini, Kraken, and traditional finance firm Franklin Templeton.
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USDe: A Stablecoin that doesn’t rely on traditional finance
Stablecoin Market: A Blue Ocean with Few Competitors
Current Mainstream Stablecoins: USDC and USDT, which are primarily backed by US Treasury bonds and other fiat-based assets. While most investors consider this method safer, it still relies on traditional financial systems to operate.
Ethena’s USDe stablecoin, on the other hand, uses the user’s collateral (ETH) to hedge price risks and maintains its peg to the US dollar through perpetual contract shorts. By hedging through Delta, it can ensure that the gains or losses of any asset are offset against each other.
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 states that its collateral is held and settled by institutional-grade companies such as Fireblocks, Copper, and Bitgo.
Ethena’s founder, Guy Young, stated:
“In the cryptocurrency space, you’re trying to create this parallel financial system, but the most important financial tool (stablecoin) is completely tied to the existing system. And we’re trying to create something that exists outside the banking system.”
According to its website, USDe currently has a market capitalization of $280 million with 3,450 users and an annualized return rate of 27.6%.
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 competitors currently. They expect to see more stablecoin projects emerge and become mainstream in the future.
According to CoinGecko data, the total market capitalization of stablecoins is $139.9 billion, with 70% concentrated in the top-ranking USDT. The market capitalization of the top five stablecoins is as follows:
USDT: $97.7 billion
USDC: $28.1 billion
DAI: $5 billion
FDUSD: $2.8 billion
TUSD: $1.3 billion
Arthur Hayes
Dragonfly Capital
Ethena
USDe
Further reading:
Dragonfly Partner Interview Summary: Ethereum is the Only Institutional Choice, the Market has Bottomed Out
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