Ethena Protocol (ENA), the project behind the synthetic dollar stablecoin USDe, has catapulted its total value locked (TVL) beyond the $2 billion mark.
This significant growth spurt comes amidst a wave of skepticism from seasoned industry experts, echoing concerns reminiscent of the ) debacle.
Experts Voice Their Skepticism on Ethena’s USDe
Based on the data from DefiLlama, on April 1, Ethena’s TVL stood at $1.54 billion. In just four days, it has surged past the $2 billion mark, marking a growth of about 30%. This significant increase highlights the growing investor interest in what Ethena offers.
The protocol’s lucrative 27% annual percentage yield () and its recently launched ENA token airdrop undoubtedly attract investors. Ethena’s airdrop on April 2 rewarded eligible users with a generous 750 million tokens.
Ethena’s surge is underpinned by substantial backing from prominent investors like Delphi Digital, Wintermute, and Galaxy Digital. This adds a layer of perceived credibility to the platform.
Yet, Ethena’s breakneck growth has come with warnings. luminary Andre Cronje voiced concerns about USDe potentially facing a collapse mirroring the TerraUSD (UST) debacle. Cronje’s worries center on Ethena’s use of perpetual contracts and the reliance on yield-based collateral.
CryptoQuant founder Ki Young Ju echoed Cronje’s warning, focusing on Ethena’s plans to integrate Bitcoin (BTC) as a USDe backing asset. He questions Ethena’s ability to maintain a delta-neutral BTC strategy during bear markets.
these critical voices, USDe has become the fifth-largest stablecoin by capitalization. ENA, Ethena’s native token, has seen a remarkable price increase from $0.62 to $1.25 in less than two days following the successful airdrop. However, at the time of writing, ENA is trading at $0.99.
