Ethena: Good Product, Questionable Token
Ethena is a DeFi project with some true fundamentals as their yield-bearing synthetic dollar - USDe - continues to see rapid growth. But does USDe’s growth translate to value accrual for the protocol’s underlying ENA token?
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TLDR
- USDe is Ethena’s main product – a yield-bearing stablecoin (more accurately described as a synthetic dollar). It has grown significantly while maintaining its peg, achieving a peak market cap of $3.6B within six months.
- Those who lock their USDe receive sUSDe, which provides attractive yields, making it appealing to DeFi users seeking income without the high volatility of traditional crypto assets. Its yield is currently around 13% APY.
- ENA, the governance token for Ethena, has minimal utility beyond voting rights, making it less appealing than the core stablecoin product. However, it is likely to do well if certain conditions are met.
- We outline out case for USDe growth, and what that may mean for the ENA token.
