This is Why Ethena and WLFI Partnered for Aave Instance

Ethena Labs announced today that it is partnering with World Liberty Financial (WLFI), Donald Trump’s token project. Together, they will list the sUSDe token from Ethena as a collateral asset on WLFI’s Aave v3 instance.

Both firms will benefit from this partnership, as Ethena Labs will have a new use case for its sUSDe token, and WLFI will have a collateral asset that has already passed Aave Core’s risk analysis.

Ethena and WLFI Partner Up on Aave

According to the announcement, this partnership is linked to a new governance proposal on WLFI. If the proposal passes, than sUSDe, a staked version of Ethena Labs’ USDe stablecoin, will become a core collateral asset on WLFI’s Aave instance.

“Should it pass, this proposal will enable WLFI users to benefit from sUSDe rewards and also WLF token rewards. This integration will increase stablecoin liquidity and utilization rates on the protocol, as sUSDe’s integration has on Aave’s Core instance,” the company wrote on X (formerly Twitter).

Although WLFI suffered dramatic setbacks in a botched presale launch, Donald Trump’s election victory has ushered in new investment capital.

Last week, WLFI invested $1 million into Aave’s AAVE governance/utility token, which boosted its value by approximately 30%. The protocol has planned an Aave instance launch since October.

Meanwhile, Ethena Labs launched a new stablecoin, USDtb, earlier this week. The new stablecoin is backed by BlackRock’s tokenized fund BUIDL, and hype around it generated a different market rally for ENA.

However, this “strategic partnership” could potentially bring healthy profits to both companies. In its governance proposal, WLFI noted that sUSDe already passed risk analysis on Aave core and is, therefore, likely to pass similar scrutiny on the new instance.

Ethena will also co-incentivize deposits of sUSDe on the Aave instance should the WLFI proposal pass.

By putting sUSDe on its Aave instance, WLFI will benefit from Ethena’s TVL and user base. Ethena will gain a new use case for this sUSDe token, increasing stablecoin liquidity and overall utilization rates.

Through this simple partnership, Ethena has found a way to boost this yield-bearing token while it can focus on building and promoting its other offerings.