$14M Capital Infusion Catapults Ethena Labs' Valuation; Stablecoin Ranks 9th Largest

On Friday, Ethena Labs, the creators of the stablecoin USDE, secured $14 million in funding from key investors. Following this recent influx of funds and a previous $6.5 million investment from Maelstrom, overseen by Arthur Hayes, in July 2023, the company’s post-valuation has risen to $300 million.

USDE Issuer Ethena Labs Raises $14M

Ethena Labs, the issuer of the stablecoin USDE, successfully garnered $14 million during a strategic investment round, spearheaded jointly by Dragonfly and Arthur Hayes’ Maelstrom. The venture, which debuted last December, currently boasts a circulation of 231,237,552 USDE within the Ethereum blockchain ecosystem.
In its seed funding phase back in July, Ethena attracted $6.5 million, courtesy of Maelstrom and an additional 11 investors. Currently, USDE holds the position as the ninth-largest dollar-pegged stablecoin by market cap.
In the last month, this fiat-aligned token’s supply surged by 85.6%, as reported by coingecko.com. The token, issued by Ethena Labs, serves as a synthetic version of the dollar that is issued on top of the Ethereum blockchain network.
It uses delta hedging and derivatives anchored in Ethereum-based assets, alongside a mechanism for minting and redeeming to ensure its stability. The framework behind USDE introduces a novel dollar-indexed asset, providing the digital currency space with a ‘bond’ that aims to sustain dollar parity beyond the confines of conventional banking systems.
This protocol leverages staked ether (ETH) to generate returns, and it employs both onchain and centralized liquidity pools to enhance operational effectiveness, overcoming the shortcomings associated with current stablecoins. Through the strategic use of derivatives for improved collateral efficiency and the assurance of on-chain transparency and custody, USDE is designed for expansion and inherent yield generation.

As the cryptocurrency sector evolves, USDE joins the ranks alongside recent dollar-pegged additions such as FDUSD, GHO, and PYUSD in the fiat token arena. In contrast, erstwhile leaders like BUSD and GUSD have seen their standings diminish, now ranking lower among the top stablecoin contenders.
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