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Author: Jack Inabinet, Bankless; Compilation: White Water, Bit Chain Vision Realm
Ethena’s tokens of the Synthetic USD stable coin issuer have experienced impressive soaring after the issuance, but once the initial rise gradually weakened, ENA found that he had fallen into a permanent decline!Why does ENA continue to plummet?What measures are the team taking to promote the use of stable currency?
On April 11, ENA’s denomination of the US dollar and BTC reached a record high. Two days before the USDE reached the peak of supply, a wider risk market deteriorated, and it seemed to have plummeted due to increasing concerns about the conflict between the Middle East.
Although the financing interest rate of the BTC and ETH and ETH sustainable fall (the main source of Ethena’s income) has greatly cooled in April, the guess of the upcoming second wave of ENA airdrop rewards has stimulated the demand for Ethena assets and keeps the yield of yields.At high.
Since then, this repayment support has collapsed,PENDLE’s USDE fixed yields compressed from more than 100% in early April to 29%.
In recent weeks, more and more evidence has begun to show thatThe cryptocurrency market may have shifted to a more negative financing interest rate system, and the financing interest rate continued to decline throughout April and May.
Although the BTC has reached a record high in the previous two times, Ethena’s Delta neutral strategy return has increased significantly, the capital interest rate has risen significantly, and the deposit has poured in large quantities.The attractiveness of USDE.Treating people’s concerns about future capital outflow.
As the interest rate of net negative funds will cause the storedors to suffer losses, Ethena set up an insurance fund at the beginning of its establishment that received part of the income generated by the fund receiving and accumulated a reserve of 39.4 million US dollars to prevent $ 2.32 billion in US $ 2.32 billion.The loss of US dollar liabilities is a trivial 1.7%buffer.
Today, Ethena announced that it will reduce the revenue reserved to the insurance fund from 50%to 20%, so that the annualized return rate of Susde will almost double to 37%. This change is expectedIntegration, this will enable users on CEX to use USDE as a transaction mortgage.
The compression of funding rates obviously affects Ethena, and forcing the agreement to take increasingly severe measures to promote the use of assets linked to the US dollar.
Unfortunately, this recent action is just a compromised measure, which temporarily disperse people’s attention to fundamental problems.Even with 50% interest rates, Ethena Insurance Fund is seriously not enough to compensate for losses caused by long -term negative funds interest rates.
Institutional participants have begun to arbitrate the basis between the spot BTC and futures contracts, which shows that the hedge fund holds the spot BTC ETF, which improves the competitiveness of the trading type used by Ethena and squeezed the profit margin.Essence
If the cryptocurrency transitions to a more negative financing interest rate environment, ENA will continue to fall into trouble, Ethena is likely to be forced to use insurance funds, and the exhaustion of insurance funds may trigger a trust crisis for USDE support.
