Ethena, a pioneering Ethereum stablecoin protocol, has successfully raised an impressive $6.5 million in its recent seed funding round. The round, led by Dragonfly Capital, garnered substantial support from prominent figures like former Bitmex CEO Arthur Hayes, as well as derivatives exchanges including Deribit, Bybit, Okx, Gemini, and Huobi. With this substantial funding, Ethena aims to make its decentralized stablecoin product a reality, set to be launched in the third quarter of 2023. What sets Ethena apart is its ambition to create a stablecoin system entirely independent of the traditional financial infrastructure.
Inspiration from Arthur Hayes: A Delta-Neutral Approach
The genesis of Ethena’s innovative stablecoin protocol can be traced back to an enlightening article written by Arthur Hayes, titled “Dust on Crust.” In this piece, Hayes expounds on the concept of constructing a stablecoin using delta-neutral techniques, derivatives, and on-chain collateral. Ethena took inspiration from Hayes’s vision and adapted it for Ethereum, introducing the concept of the “Nakadollar.” By applying this model to Ethereum, Ethena aspires to revolutionize the crypto space by creating the first-ever crypto-native yield-bearing stablecoin that is completely disentangled from the traditional banking system.
Unveiling the “Usde” and the “Internet Bonds”
Ethena has charted its course for issuing financial instruments in two distinct phases. The first phase involves the introduction of “usde,” an on-chain collateral derivatives-based stablecoin product slated for release in Q3 2023, leveraging the funds amassed during the seed round. However, this is just the beginning of Ethena’s ambitions. The second phase aims to introduce what they refer to as the “internet bond,” designed to function akin to a traditional U.S. treasury but without any ties to central banks or financial institutions. This ambitious venture is set to be built upon staked Ethereum deposits and usde, culminating in the creation of the world’s first globally accessible and permissionless crypto savings instrument.
The Potential Market: Over $130 Billion
Ethena’s vision is driven by a grand aspiration to tap into a market worth over $130 billion. They see their permissionless savings return product as “the largest market opportunity that crypto can provide for the world.” This optimistic outlook is underscored by the growing global adoption of stablecoins for savings and remittance-related purposes, making the need for a truly decentralized, stable, and capital-efficient stablecoin product all the more crucial. COUPON CODE: XRFDS#22
Dragonfly’s Backing: Reinforcing the Importance of Ethena’s Vision
Tom Schmidt, a general partner at Dragonfly Capital, emphasized the significance of a truly decentralized and stable stablecoin solution, particularly in light of the surging popularity of stablecoins worldwide. He lauded Ethena’s groundbreaking design, which not only addresses pertinent issues but also caters to a broad user-base. The partnership with Ethena promises to breathe life into their transformative vision and bring stability to the dynamic world of cryptocurrencies.
In conclusion, Ethena’s recent success in raising $6.5 million in seed funding marks a significant step towards achieving its goal of creating a banking system independent stablecoin. With its innovative approach and inspired by Arthur Hayes’s insights, Ethena is poised to redefine stability in the crypto realm and pave the way for greater financial accessibility and empowerment. As the world eagerly awaits the launch of usde and the internet bond, Ethena’s bold vision is set to shape the future of stablecoins and make a profound impact on the global financial landscape. What are your thoughts on Ethena’s transformative journey? Share your opinions in the comments below.
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