Analyst Discussion: Ethena

Ethena, launched on February 19th, presents a unique stablecoin approach by combining centralized and decentralized features to offer transparency, censorship resistance, scalability, and stability. The stablecoin, which mints USDe at a 1:1 USD ratio using stETH deposits, faces criticism and skepticism regarding decentralization, custody risks, and assumptions about positive yield. Analysts view Ethena both as a stablecoin and a structured product, highlighting its potential as a composable carry trade. Concerns include sustainability, competition with existing alternatives like DAI, and scalability challenges linked to ETH perpetual markets.

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