Ethena Labs Secures $14 Million in Funding, Unveils USDe Stablecoin with a $300 Million Valuation
In Brief
Ethena Labs successfully garnered $14 million in funding aimed at enhancing its team and accelerating progress on its Ethereum-based USDe stablecoin, which it has now officially launched.
The creators of the Ethereum (ETH)-backed USDe stablecoin Ethena Labs raised $14 million in a seed extension funding round led by prominent investors including DragonFly, Bybit, OKX, Deribit, and Gemini, with additional backing from Brevan Howard Digital, Franklin Templeton, Galaxy Digital, Hashed, Nic Carter, and Castle Island Ventures.
The firm intends to use the newly acquired funds to expand its workforce, specifically by bringing on board quantitative engineers and business development leads focused on the Asian market. This latest funding round has propelled the company's valuation to $300 million .
Ethena Labs is dedicated to the evolution of the USDe stablecoin. USDe runs on the Ethereum network and is backed by derivatives. The strategy employed for maintaining its price stability involves delta-neutral hedging across both centralized and decentralized exchanges. Essentially, USDe finds its stability through a blend of long-staked ETH position and a short ETH position.
As outlined by Ethena Labs, this strategy guarantees that any losses or gains across either position will offset each other, leading to a yield profile reflected in US dollars. This concept draws parallels to standard cash and carry methods that utilize treasuries and futures.
Ethena Labs also provides a dollar-denominated savings solution known as an 'internet bond.' This innovative bond allows users to accrue value via sUSDe, which is the staked version of USDe, capturing both the natural yield from staked ETH as well as profits from the futures markets. The company claims that this bond has maintained an annual yield ranging from 12-20% over the past couple of months.
As for the finer details surrounding their funding, the company has indicated on X that they will soon share accurate numbers related to this investment round.
Ethena Labs Publicly Launches USDe
In conjunction with this funding, Ethena Labs proudly announced the public launch of the USDe stablecoin, which had initially entered the market quietly last year and quickly amassed over $224 million in total value locked (TVL).
To utilize USDe, Ethena Labs enables users to use US dollars, Ethereum, or liquid staking tokens as their collateral.
Founded in 2023, the Portugal-based Ethena Labs envisions USDe as a revolutionary instrument that could redefine user engagement within the cryptocurrency market. In contrast to traditional options, the stablecoin offers several benefits for investors who wish to engage with the digital currency space without the anxiety of value fluctuations. Recently, the platform received support received support from Binance Labs after completing their Season 6 incubation initiative.
This fresh investment is poised to fuel Ethena Labs' expansion and operational growth, further enhancing the development of USDe and solidifying its formidable footprint in the cryptocurrency arena.
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