Without naming the protocol, Cronje shared his concerns about negative funding rates potentially leading to an “unbacked asset.”
Fantom creator Andre Cronje is concerned that incentives behind Ethena Labs’ USDe could lead to the next Terra-Luna-like meltdown. Cronje is considered one of the most influential thought leaders in decentralized finance (DeFi).
Without mentioning the protocol or its synthetic dollar directly by name, Cronje shared a note about his concerns regarding the risk management behind Ethena Labs, highlighting the issue with funding rates in perpetual futures contracts. In an April 3 X post, Cronje wrote:
Ethena's USDe stablecoin yield first caused widespread concerns on Feb. 19, when it launched on public mainnet with a 27.6% annual percentage yield (APY), which was considerably higher than failed Terra UST’s 20% yield on Anchor protocol, which collapsed in May 2022, erasing tens of billions of dollars of value in a few days.
