In order for the stablecoin USDe of Ethena, one of the popular altcoin projects in recent weeks, to work safely, Ethena’s reserve fund needs to be protected.
Blockchain analysis company CryptoQuant conducted a review of USDe, which is issued by Ethena and has a 1:1 value with the US dollar but is not backed by US dollar reserves.
Ethena protects the value of USDe by constantly hedging the risk it is exposed to in the spot cryptocurrency markets with the perpetual futures market, which while providing return opportunities for USDe holders, also brings risks such as funding risk.
ENA, Ethena’s own token, entered the market at the beginning of this month as a part of Binance’s 50th Launchpool project.
According to CryptoQuant’s analysis, in order to prevent these risks, USDe’s market value must grow in parallel with especially when the funding rates in perpetual futures markets drop to extremely negative levels.
Another point emphasized by analysts is that the maintenance ratio (the yield amount transferred to the reserve fund) should be at least 20% for the reserve fund to be maintained.
CryptoQuant analysts said, “Investors exposed to USDe’s risk should check and make sure that Ethena’s reserve fund and maintenance ratio are in good condition as the market value of USDe increases.”
