The stablecoins market has seen a newcomer rise quickly, challenging established players such as USDT and USDC.
USDeRecently launched stablecoin has amassed a $2 billion market capitalization in just a short time. USDe is unique in its approach to stabilization, as it’s not backed by US dollar but by cryptocurrency like ETH You can also find out more about the following: BTC.
USDe, under the direction of Julio Moreno (Head of Research, CryptoQuant), has developed a strategy unique to the market. It is generating controversies and provoking discussions.
USDe’s Rapid Rise
USDe’s Investors and experts have been drawn to the rapid rise of USDe’s market capitalization. Unlike other stablecoins tied to fiat reserves or supported by cryptocurrency over-collateralization, USDe maintains its solid 1:1 peg to the US dollar through a method called “delta hedging staked Ethereum collateral.”
The new approach protects USDe against the volatile nature of the assets that it is based on, and ensures stability in unpredictable markets.
According to insights from Ethena Labs’ founder, USDe has been the fastest growing stablecoin ever since it was launched. USDe is a stablecoin that has the ability to provide returns for its holders. This feature, which was absent from other leading stablecoins such as USDT and USDC, contributes significantly towards USDe’s growth.
USDe is able to achieve this through leveraging short-term funding from exchanges, and ETH staking reward rewards. This sets it apart from its competitors.
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Innovative Play
Julio Moreno is the Head of Research for CryptoQuant. He stresses that two factors are critical to USDe investors. These include the size of reserve funds relative to the market capitalization and the rate of reinvestment of yields.
Funding payments for short positions will increase as USDe’s capitalization grows. Moreno suggests keeping USDe stable by maintaining a keep rate of above 20%.
If the market cap is $5 billion or $7.5 billion (or $10 billion), then the ideal reserve fund would be $40, $60, and/or $80 millions.
Long-Term Stability
USDe adapts quickly to changes in the market to ensure its stability on a long-term basis. USDe strives to be a trustworthy option for investors by closely monitoring key metrics, actively managing risk and maintaining a close eye on the market.
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Mustafa Mulla
Mustafa is a writer who has written about Blockchain technology and cryptocurrency for many years. He is a former trader and works in Fintech since 2017.