Shard

April

USDe

Ethena

Developer Andre Cronje published a post questioning whether Ethena will be the next UST.
In a post on X on April 3, Cronje compared Ethena (<a href="https://coinmarketcap.com/currencies/ethena/" target="_blank" rel="noopener noreferrer nofollow">USDe</a>) to the infamous UST stablecoin.
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 “UST I had a high degree of confidence would fail, the simply mechanisms didn’t make sense to me, however, a lot of people I consider to be very smart were very vocal about how it can’t fail, this reached a point where I was convinced “I was wrong.”
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Cronje analyzed the structure of perpetual contracts, a derivative product that allows traders to speculate on the price movements of an asset without holding the asset. He highlighted a critical vulnerability in this system: the dependence on income-generating assets such as staked <a href="https://crypto.news/tag/Ethereum/" target="_blank" rel="noopener noreferrer nofollow">Ethereum</a> (stETH) as collateral.
By drawing a parallel between the structural flaws he sees in USDe’s system and the mechanisms that led to Terra’s downfall, Cronje raises a red flag about the sustainability of complex financial products that lack transparent risk mitigation strategies.
You might also like: <a href="https://crypto.news/ethenas-usde-stablecoin-hits-public-mainnet-backed-by-eth-hedges-for-liquidity/" rel="noopener noreferrer nofollow"> Ethena’s USDe stablecoin hits public mainnet, backed by ETH hedges for liquidity </a>
Responding to Cronje’s criticism, Ethena Labs founder Guy Young, also known as Leptokurtic, acknowledged the validity of the concerns raised.
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 These aren’t mid curve concerns at all <a href="https://twitter.com/AndreCronjeTech?ref_src=twsrc%5Etfw" target="_blank" rel="noopener noreferrer nofollow">@AndreCronjeTech</a>, you rightly point out risks that absolutely do exist here Will work on a longer form response for you by end of this week with some thoughts— Leptokurtic (@leptokurtic_) <a href="https://twitter.com/leptokurtic_/status/1775415378371375287?ref_src=twsrc%5Etfw" target="_blank" rel="noopener noreferrer nofollow">April 3, 2024</a>
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Yesterday, Ethena Labs announced the launch of its governance token, ENA, and the expansion of its yield-earning <a href="https://crypto.news/tag/stablecoin/" target="_blank" rel="noopener noreferrer nofollow">stablecoin</a>, synthetic dollar token USDe. In addition, Ethena <a href="https://crypto.news/ethena-labs-launch-ena-with-a-750m-airdrop-as-makerdao-grabs-usde/" target="_blank" rel="noopener noreferrer nofollow">launched</a> an airdrop of 750 million ENA.
Users who participate in the Shard Campaign can claim free tokens. The number of coins participants receive will be proportional to the ‘shards’ or points accumulated before April 1.
You might also like: <a href="https://crypto.news/ethena-labs-reportedly-suffers-from-security-incident-analysts-suspect-290k-exploit/" rel="noopener noreferrer nofollow"> Ethena Labs reportedly suffers from security incident, analysts suspect $290k exploit </a>

Developer raises concerns about Ethena becoming new UST

crypto.news

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