Ethena launched its own stablecoin called USDe and a lot of people looked at the high-yield products and thought, “is this the next Terra Luna?”
They said that not because of the similarities but because of the unusually high returns.
What Ethena are doing is essentially a tokenised cash-and-carry trade.
Translated, it means you deposit collateral, USDC or USDT or whatever, and they will stake that collateral and open up a corresponding short position to the long position in the collateral.
So they’re sort of balancing the market risk from the collateral, so that means that whatever happens to the price of the staked asset, your position will not change.
So there’s no market risk, in theory. It made headlines chiefly because of the high yield, which comes from the fact that now people are long more than they short.
To me, this is just my 2 cents, it sounds pretty risky. And potentially unsustainable, but that’s just me.
bitcoinea 
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