As Bitcoin started the new week with gains, several altcoins also experienced notable upward movement. One standout in the market was Ethena (ENA), which saw a sharp price increase following a major announcement regarding Solana (SOL).
Ethena Proposes Adding Solana as a Reserve Asset
The Ethena community recently proposed adding Solana (SOL) and its staked versions (BNSOL and bbSOL) as reserve assets to support its stablecoin, USDe. This move aims to diversify the asset pool backing USDe, thus enhancing its effectiveness and utility in the DeFi space.
If approved, Solana will join Bitcoin (BTC) and Ethereum (ETH) as collateral assets within the Ethena ecosystem. The proposal outlines a strategy for allocating Solana support, using the same hedging mechanism that Ethena currently applies to Bitcoin and Ethereum futures.
The community has also emphasized that this allocation will be scaled cautiously, taking into account the shorter trading history of Solana perpetual futures, lower liquidity, and less historical funding rate data, all in consultation with the Risk Committee.
ENA Price Surge
Following the announcement, Ethena (ENA) saw a significant price increase, jumping by 17.7% to reach $0.40. This rise highlights the market’s positive reaction to the potential inclusion of Solana as a reserve asset.
What is USDe?
USDe differs from traditional stablecoins like Tether (USDT) or Circle (USDC) because it is a synthetic stablecoin. Unlike traditional stablecoins, USDe is not backed 1:1 by fiat assets. Instead, it maintains its peg to the US dollar by leveraging a cash-and-carry trade that uses large open-interest futures positions to hedge risk, supported by a reserve fund to manage volatility in market conditions.
This innovative approach helps USDe remain stable at $1, even under fluctuating market conditions.
As always, Turkish NY Radio will continue to keep you updated on the latest developments in the crypto space.
