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Decentralized finance protocol Ethena (ENA) has seen its total value locked (TVL) soar more than 1,700% since the start of the year, reaching more than $1.57 billion on Tuesday 2nd, driven by high yields and a airdrop into your ecosystem.

Following the success of Ethena, lending platform MakerDAO intends to allocate 600 million of its decentralized stablecoin DAI to USDe and sUSDe, according to a proposal on the MakerDAO forum.

Ethena Labs launched the mainnet version of its synthetic stablecoin USDe on February 19, following an investment round backed by Dragonfly, a venture capital firm, and others. This follows a previous round of $6 million raised from Binance Labs, Bybit, OKX Ventures, Gemini, among others.

When Ethena’s USDe launched, promising a 27.6% yield, much of the crypto community raised eyebrows considering the collapse of Terra’s UST algorithmic stablecoin, which offered similar yields. However, the Ethena team stated that USDe works differently than UST.

According to documents on its homepage, Ethena maintains USDe parity and generates high yields by collateralizing it with staked Ethereum and delta-hedging these assets with short Ethereum positions on centralized exchanges.

Thus, yields come from staked Ethereum and the funding fees received on these short positions. As a result of its high-yield offerings, Ethena’s TVL soared to $1.57 billion, according to data from DeFiLlama.


The ENA token airdrop was launched this Tuesday, 2nd, rewarding USDe holders with 750 million ENA tokens, which constitute 5% of its total supply. Major exchanges such as Binance, Bybit and Bitpanda have also listed the tokens for trading on their platforms.

The airdrop coincides with a Spark SubDAO proposal on the MakerDAO forum, which will see 600 million of its DAI tokens allocated to Ethena’s USDe and sUSDe through Morpho Labs.

“This will be scaled gradually as Ethena grows, but for now we believe it is prudent to limit the total allocation to this level,” the proposal stated. This measure will cause Ethena’s TVL to grow significantly. Ethena also stated that it is looking to diversify its delta hedge into Bitcoin in the coming months.

However, Spark SubDAO’s recent proposal has drawn criticism from Marc Zeller, co-founder of Aave, who considers the move “reckless”. He even wrote a proposal to remove DAI’s collateral status on Aave.

Another cryptocurrency analyst, TardFiWhale.eth, known for predicting the fall of UST, also posted a thread on X, suggesting that there are several risks in Ethena’s USDe, especially with the possible move of MakerDAO.

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