Ethena

<ul><li>Ethena&#39;s USDe faces potential funding risks as its market cap grows, necessitating a larger reserve fund to maintain stability.</li><li>The &#34;keep rate&#34; within Ethena&#39;s protocol is crucial for fortifying reserves against market downturns and sustaining USDe&#39;s peg.</li><li>Algorithmic stablecoins like USDe, offering high yields, evoke memories of past market collapses, urging cautious assessment and monitoring.</li></ul>The<a href="https://cryptotale.org/bullish-whale-makes-big-splash-as-15-95m-ena-withdrawal-rocks-ethena-ecosystem/" rel="noopener noreferrer nofollow"> Ethena</a> (ENA) stablecoin, a synthetic dollar protocol running on Ethereum, has recently encountered remarkable growth and new challenges, prompting a closer examination of its stability and underlying risks per <a href="https://x.com/CryptoBusy/status/1780832434868961344" rel="noopener noreferrer nofollow">CryptoBusy</a>, a top analyst. Amid its surge in <a href="https://x.com/leptokurtic_/status/1777352115230224689" rel="noopener noreferrer nofollow">market capitalization</a> to over $2 billion since its launch in February, concerns have arisen regarding the sustainability of its peg to the US dollar and its ability to weather fluctuations in the crypto market.One of the primary risks highlighted by CryptoQuant, an on-chain analytics firm, is the potential for negative funding rates impacting USDe, the stablecoin issued by <a href="https://cryptotale.org/ethena-ena-soars-with-impressive-post-launch-growth-an-analysis/" rel="noopener noreferrer nofollow">Ethena</a>. The stablecoin maintains its peg by employing delta hedging strategies involving short positions on centralized exchanges. However, as the market cap of USDe grows, so do the risks associated with maintaining this peg.Currently trading at<a href="https://coinmarketcap.com/currencies/ethena/" rel="noopener noreferrer nofollow"> $0.850643</a>, CryptoQuant&#39;s<a href="https://x.com/jjcmoreno/status/1780336592403448045" rel="noopener noreferrer nofollow"> analysis</a> indicates that the current reserve fund of $32.7 million may suffice if the market cap of USDe remains below $4 billion. However, as the stablecoin&#39;s market cap expands further, particularly to $5 or $10 billion, the reserve fund would need substantial augmentation, potentially to the range of $40 to $100 million, to navigate periods of severely negative funding rates effectively.<a href="https://cryptotale.org/crypto-storm-alert-is-ethenas-usde-stablecoin-ready-for-market-turbulence/" rel="noopener noreferrer nofollow">Read more on Cryptotale.</a>Visit the links for more information <a href="https://cryptotale.org/" rel="noopener noreferrer nofollow">Website</a> | <a href="https://twitter.com/cryptotalemedia" rel="noopener noreferrer nofollow">Twitter </a>| <a href="https://t.me/cryptotale_news" rel="noopener noreferrer nofollow">Telegram </a>| <a href="https://www.instagram.com/cryptotalenews/" rel="noopener noreferrer nofollow">Instagram </a>|

Crypto Storm Alert: Is Ethena's USDe Stablecoin Ready for Market Turbulence?

CryptoTale

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