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Ethena Labs, a decentralized finance platform, has attracted attention for offering a 27% APY through staking ETH and a positive funding rate. The platform has launched the USDe stablecoin and a Shard Campaign to engage users, sparking debate in the crypto community about its sustainability and risks. Ethena's high yield on stablecoins is generated through a synthetic dollar protocol, with questions raised about its innovative nature or potential risks. The platform's yield comes from a basis trade productized into a stablecoin, involving staking ETH on LidoFinance and margining $STETH on a third-party platform to short ETH. Despite the significant rise in USDe token market cap and staking yield, concerns have been raised about the stability and risk associated with Ethena's offerings.
šØPSAšØ I don't know who needs to hear this but @ethena_labs is fundamentally broken. You can and may lose all your capital in $USDe in the future. Not only is USDe not a stablecoin, it is NOT a synthetic dollar. USDe is a structured product that has one specific investmentā¦ https://t.co/Lenb8pnp5D
Ethena has seen a staggering rise in its USDe token market cap, increasing almost fourfold from $91 million to $352 million since the start of 2024. The inflows can partly be attributed to USDe's whopping 27.6% staking yield. @httpsageyd reports https://t.co/umetEOjuAj
š«£ @ethena_labs Stablecoin 27% Yield is Triggering Terra-Induced PTSD People are asking, where does the yield come from? and is it actually a stablecoin? Read more: https://t.co/zTttdUhAgG https://t.co/Zy4fAA8RzJ
