Ethena Labs Adds BTC as Collateral for its USDe

Ethena Labs, the creators of USDe, have incorporated Bitcoin as collateral for their synthetic dollar-pegged product with the goal of expanding significantly from its current $2 billion supply.

The surge in Bitcoin open interest on major cryptocurrency exchanges, from $10 billion to $25 million in the past year, allows USDe to increase its capacity by 2.5 times, according to Ethena’s April 4 post on X.

USDe was launched on Ethereum on February 19, with Ethena initially offering a 27.6% annual percentage yield (APY) for staked USDe, causing concern among the community.

However, the APY has since decreased to 7.15% after reaching a peak of 113% on March 5.

Ethena believes that incorporating Bitcoin as collateral will enhance liquidity and provide a safer and more robust product for USDe token holders.