Ethena may not be as risky as Terraform Labs’ disastrous UST… but it’s not risk-free either. Here’s what you need to keep an eye on.
Ethena Labs new stablecoin topped $2 billion in market cap faster than any other dollar-pegged asset in cryptos history. But USDes meteoric rise has sparked fears that it might repeat the high-profile collapses of other stablecoins.
While its attractive yield of 17.2% has drawn frequent comparisons to Terraform Labs disastrous stablecoin UST, its really nothing like UST, which had the circular backing of its own token, an algorithm, and a few hopes and prayers.
Ethena distances itself from such predecessors by marketing its stablecoin as a synthetic dollar.
