Ethena USDe

USDe

Fantom

Foundation

Ethena

Andre Cronje, Co-Founder of Fantom Foundation, in his latest post, jumped into the complexities and risks linked with a new protocol gaining traction in the digital assets space. It is expected that Cronje is questioning whether Ethena (USDe) is the next UST. However, <a href="https://news.todayq.com/arthur-hayes-goes-bullish-on-ethena-expects-ena-to-hit-10/" rel="noopener noreferrer nofollow">Ethena Lab’s ENA</a> had gone viral overnight as its price jumped by around 50% in the last 24 hours. Ethena is the new way? 
Fantom Foundation co founder, known for his insightful analyses, candidly opened up the discussion on the uncertainty factor of the crypto market. He talked about his past experiences with projects like UST and FTX. This was the situation where his expectations were challenged.&nbsp;
He tried to explain that Perpetual contracts allow trading without the need for underlying assets. This is done with buyers and sellers paying funding rates to ensure alignment with spot prices. On the other hand, Margin collateralization is a process that uses yield-based assets like stETH to fund short positions.
Cronje had raised concerns about the sustainability of such a model. He particularly pointed out the volatile market conditions and questioned the mechanism’s dependence on positive funding rates. He added the potential risks of negative funding and collateral liquidation in the situation. Ethena founder said that Andre Cronje pointed out the risk but will work on a longer form response.
He went on to draw parallels to the law of large numbers highlighting the risky nature of assuming stability based on statistical probability. However, the protocol may work well in favorable conditions but he warns of the inherent risks when the market situation moves ahead. What’s up with the market? 
The global crypto market is dealing with high selling pressure as of now but the sentiments have remained bullish in the industry. The biggest crypto, Bitcoin, might have dropped by more than 7% in the last 7 days, however, the altcoins are regularly posting gains. This indicates positive emotions in the market. The cumulative crypto market cap is marginally up over the past day. It now stands at $2.49 trillion.
Seeking clarity from the crypto community, Cronje had invited inputs to understand the potential blind spots and mitigate risks. His introspective approach underscores the importance of critical analysis and collaboration in navigating the evolving landscape of decentralized finance.
As Cronje awaits responses and further deliberation, his words are serving as thought-provoking challenges. It also highlights the uncertainties faced by innovative protocols in the crypto ecosystem.

Is Ethena USDe the next UST? Fantom founder sounds alarm

Todayq News

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