• Ethena (ENA) saw a 22.55% price increase, rising from $0.3312 to a high of $0.4059.

  • Ethena Labs proposed adding Solana (SOL) as collateral for its synthetic stablecoin, USDe.

The synthetic dollar protocol Ethena native crypto ENA has jumped more than 22.55% in the last 24 hours, rising from a low of $0.3312 to a high of $0.4059. Currently, ENA is trading at $0.3941 with a market cap of $1.09 billion. Over the past week, ENA has gained over 33.66%, and in the last month, it has surged by an impressive 77%. Additionally, the daily trading volume for ENA has soared over 128% in the past day to $230.61 million.

Ethena (ENA) Price Chart (Source: CMC )

The exciting rally in the altcoin primarily driven by Ethena Labs’ recent proposal to integrate Solana (SOL) into the USDe ecosystem as a backing asset. This announcement follows Ethena’s launch of six USDe synthetic stablecoins on the Solana blockchain in August, which utilized LayerZero’s OFT standard. 

What Makes Ethena’s USDe Different from Other Stablecoins?

What sets USDe apart from stablecoins like Tether (USDT) and Circle’s (USDC) is its synthetic nature; it’s not backed by fiat assets at a 1:1 ratio. Instead, USDe maintains its $1 peg by collateralizing stablecoins and utilizing a hedged cash-and-carry trading strategy. This approach is further supported by a reserve fund created to mitigate risks arising from market fluctuations.

However, the integration of SOL as collateral is still awaiting approval from Ethena’s independent Risk Committee. If the Risk Committee greenlights the proposal, Ethena plans to allocate $100-200 million in SOL. This allocation would constitute around 5-10% of SOL’s open interest. 

Additionally, Ethena has recently allocated $46 million from its reserve fund. This investment focuses on tokenized real-world assets through platforms like BlackRock’s BUIDL and others. As the ecosystem continues to evolve, Ethena’s innovative strategies are poised to capture the interest of both investors and enthusiasts alike.

Highlighted Crypto News Today

Monochrome Unveils Australia’s First Spot Ethereum ETF on Cboe