Ethana shakes up DeFi with $300m inflows and 27% annualized yield
The post Ethana shakes up DeFi with $300m inflows and 27% annualized yield appeared on BitcoinEthereumNews.com.
Amid the burgeoning world of decentralized finance (DeFi), Ethena, a newly launched platform, has quickly captured attention and investment, boasting an enticing annualized yield of 27% for holders of its USDe stablecoins. The platform, which had been in beta testing among a limited group, recently opened its doors to the public, leading to a surge in inflows, with over $287 million of USDe minted as of Tuesday morning, $50 million of which poured in after its public launch. Ethena’s unconventional yield model Ethena’s allure lies in its unconventional method of generating yield, primarily by shorting ether futures. This approach, while novel, has sparked both intrigue and skepticism within the crypto community. The platform leverages a combination of staking ether to a validator, yielding 5% on the capital, and shorting ether futures to capture the funding rate, which historical modeling suggests could exceed 20%. The latter mechanism operates akin to a “cash and carry” trade, exploiting funding payouts rather than relying on asset price movements. opened twitter and seeyall raised a bunch of moneyfor someone to do cash carry for u?@ethena_labs can’t u just sign up on the exchange and just hedge off on coin margined urself tf nvm yall need influencers and vcs to tell u what buttons to clickhttps://t.co/vgpGYfpGmQ — ҈ (@jeff_w1098) February 19, 2024 Risk and criticisms While Ethena’s high-yield offering has attracted significant attention, it has not been immune to criticism and skepticism. Some within the crypto community have expressed concerns regarding the sustainability of its model, citing past failures of similar projects. Additionally, questions linger around the management of associated risks, with experts highlighting potential challenges, particularly in risk management. Addressing concerns In response to these apprehensions, Conor Ryder, Ethena’s head of research, has sought to assuage doubts, asserting that the platform’s parameters were set based…
Filed under: News - @ February 20, 2024 4:24 pm