An analyst has warned that the increasing popularity of Ethena’s USDE, a synthetic dollar not backed by fiat but by assets like staked ETH derivatives, could disrupt traditional fiat-backed stablecoins such as USDT and USDC. This warning comes amid Ethena and its stablecoin USDE’s partnership with the crypto exchange Bybit, which supports perpetual trading and offers innovative incentives like yields on trades that could divert traders from USDT and USDC. Critics, however, question the sustainability of the high yields promised by USDE, suggesting that the $10 million Reserve Fund might not be sufficient to maintain its peg if yields drop.
Analyst Warns Ethena’s USDE May Disrupt Stablecoin Market Dominated by USDT and USDC
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