Cryptocurrency enthusiasts on X are expressing their concerns about the staking yield of Ethena Labs’ recently launched stablecoin. The USDe stablecoin, which is based on the Ethereum blockchain, was launched on the public mainnet on February 19, as stated in a post on the company’s official page. Ethena Labs’ homepage currently indicates that the USDe stablecoin offers an impressive annual percentage yield (APY) of 27.6%. This is significantly higher than the 20% yield offered by Anchor Protocol on Terra’s UST before Terra collapsed in May 2022.
The high yield opportunity has sparked widespread concerns within the crypto community. According to 0xngmi, a pseudonymous code contributor to DefiLlama, the real concern lies in the potential yield inversion rather than Ethena’s high stablecoin yield. In a subsequent reply, 0xngmi emphasized that Ethena is fundamentally different from Anchor Protocol, which he classified as a Ponzi scheme.
Eitan Katz, the co-founder and CEO of Kima, a decentralized money transfer protocol, expressed his belief that maintaining such high yields would be challenging in a bear market. He suggested that Ethena may have to lower its yield in the future. Katz stated, “[USDe’s] sustainability mostly depends on continuous market growth and the ability to manage risks effectively – and if done right, these can provide stability, although in the crypto industry, it is very unlikely.”
Ethena has achieved significant milestones, with a total value locked of $297.9 million and over 4,460 registered users, according to its homepage. Data from DefiLlama shows that USDe’s market cap has increased by 20.6% in the past 24 hours, reaching $291.93 million.
Cointelegraph has reached out to Ethena Labs for comment. Anthony Sassano, an angel investor and founder of The Daily Gwei, believes that the investor concern surrounding Ethena’s yield is a positive sign for the crypto industry.
In terms of funding, Ethena Labs announced on February 16 that it raised $14 million, with support from venture capital firm Dragonfly and other investors. The company had previously raised $6 million in 2023 from Binance Labs, Gemini, Bybit, Mirana Ventures, OKX Ventures, and Deribit to develop decentralized finance solutions on the Ethereum blockchain.
This is an ongoing story, and additional information will be provided as it becomes available.