The Ethena (ENA) community has made headlines by proposing Solana (SOL) as a reserve asset for its synthetic dollar, USDe. This pivotal decision has sparked a notable 17% rise in ENA’s value, bringing it to $0.39 and pushing its market capitalization beyond $1.06 billion.
How Will Solana Strengthen USDe?
The proposal intends to implement Solana as a reserve asset to bolster USDe’s stability. Drawing parallels with past hedging strategies involving Bitcoin (BTC) and Ethereum (ETH), Ethena seeks to diversify the collateral underpinning USDe. This initiative aims to boost DeFi engagement and enhance market liquidity.
What Impact Will This Have on Market Liquidity?
Alongside Solana, Ethena has suggested incorporating Binance Liquid Staked SOL (BNSOL) and Bybit Liquid Staked SOL (bbSOL) into the reserve framework. This strategy is designed to strengthen USDe’s support and improve overall market efficiency.
Key points of the proposal include:
- Ethena launched USDe earlier this year on the Solana blockchain.
- There will be a phased and controlled integration of SOL into the reserve to mitigate risks.
- The aim is to enhance protocol revenue while expanding trading capacity to $2-3 billion.
The recent developments have positively influenced ENA’s market performance, with an increase to $0.39. Analysts forecast potential price targets of $0.50 to $0.69, and possibly even $1.50 in the near future.
Disclaimer: The information contained in this article does not constitute investment advice. Investors should be aware that cryptocurrencies carry high volatility and therefore risk, and should conduct their own research.
Source: https://en.bitcoinhaber.net/ethena-chooses-solana-for-usde-reserve-asset