Bittime - The DeFi ecosystem is enlivened by the presence of Ethena. After the token airdrop was opened for claiming, Binance immediately launched Ethena (ENA) on their financial products, including financial management, flash swap, leverage, and contracts. In just 1 hour after opening, ENA's investment volume exceeded 19 million BNB. The price of the ENA token soared more than 30% in one day, immediately entering the billion dollar market cap range.
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Ethena then announced the launch of the second season of its Epoch 1 “Sats” program. Users can save USDe to earn Sats. The new Pendle pool in Mantle is capped at $100 million and will accept additional Eigenlayer points.
USDe's pendle pool on ETH mainnet is also capped at $100 million. Existing users will receive an additional 20% reward for depositing funds into the pool.
The involvement of big players is increasingly heating up the atmosphere
MakerDAO founder Rune Christensen was seen transferring 5.66 million USDT to Ethena and minting 5.655 million USDe. This is Rune's first participation in Ethena. Not only that, MakerDAO is also considering allocating 600 million DAI to USDe and staking USDe (sUSDe) through a DeFi loan agreement, Morpho Labs.
However, amidst the good news, critical voices also emerged from the community. Marc (@lemiscate), founder of Aavechan, questioned DeFi practices which were considered too reckless. He criticized MakerDAO's decision to allocate 600 million DAI, which is equivalent to 20% of the total supply, to an "untested" protocol like Ethena without adequate risk mitigation and considering the oracle issue that occurred.
According to Marc, this action is very reckless considering that USDe is an asset that is vulnerable to market fluctuations.
The Importance of Risk Management in DeFi
Stablecoins are one of the most important instruments in the crypto world. Stablecoins are the main denomination in various transactions, both on centralized and decentralized platforms, both in spot and futures markets.
With a transaction value above $12 trillion, stablecoins are among the top assets in DeFi, accounting for more than 40% of total value locked (TVL), and are the most widely used assets in the decentralized crypto market.
USDe, as a stablecoin, is designed to offer scalability to increase capital utilization through the use of derivative instruments.
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Ethena's role in DeFi
Through Ethena's design, USDe is claimed to be able to scale itself while maintaining capital efficiency because the staked ETH assets are perfectly hedged through equivalent short positions, so it only requires 1:1 "collateral" to create synthetic USD.
Marc uses an analogy to explain the importance of risk management when using USDe: adding 5 cl of gin to a cocktail might make you have a good time, but if you drink 3 bottles of gin, you could be “toilet friends” all night long.
This metaphor emphasizes the importance of proper risk management and setting reasonable upper limits in DeFi projects.
Criticism of MakerDAO Decision
Analyst Duo Nine (@DU09BTC) also warned of the potential risks posed by MakerDAO's decision. He accused MakerDAO of “printing free money” that could ultimately harm ordinary investors: “They issued 100 million DAI, which can only be borrowed using USDe/sUSDe as collateral.
For users, this means huge fees, while for Makers, this is huge profits, with potential annual returns of 100 million DAI reaching 66%!”
Danger of Market Trap
Duo Nine identified a potential pitfall: USDe's current market value is around US$10 billion, with US$2 billion representing MakerDAO liabilities.
If USDe loses peg and a panic occurs, MakerDAO will prioritize selling USDe to secure profits, while users who borrowed DAI with USDe and sUSDe on Morpho risk being liquidated.
Will There Be a "Luna" Again?
Remembering Luna's experience, the decoupling incident (peg loss) on algorithmic stablecoins, observers are worried that a similar incident will happen again.
Some see similarities between USDe and Luna, and worry that Ethena could become the next "black swan event" in the DeFi ecosystem due to inappropriate risk management.
Of course, the biggest hope is that this prediction does not come true. No one wants to experience a bitter event like Luna's collapse again.
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You can buy and sell crypto assets in an easy and safe way via Bittime . Bittime is one of the best crypto applications in Indonesia which is officially registered with Bappebti.
To be able to buy crypto assets on Bittime , make sure you have registered and completed identity verification. Apart from that, also make sure that you have sufficient balance by depositing some funds into your wallet. For your information, the minimum purchase of assets on Bittime is IDR 10,000. After that, you can purchase crypto assets in the application.
Learn Complete Guide How to Buy Crypto on Bittime .
Monitor price chart movements of Bitcoin (BTC) , Ethereum (ETH) , Solana (SOL) and other cryptos to find out today's crypto market trends in real-time on Bittime.
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DISCLAIMER: This article is informational in nature and is not an offer or invitation to sell or buy any crypto assets. Trading crypto assets is a high-risk activity. Crypto asset prices are volatile, where prices can change significantly from time to time and Bittime is not responsible for changes in fluctuations in crypto asset exchange rates.
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