Ethena Labs, the team behind synthetic stablecoin USDe, has proposed adding Solana (SOL) as part of the token’s collateral mix. This proposal, currently under review by Ethena’s independent Risk Committee, suggests integrating $100-200 million in SOL positions, representing 5-10% of the asset’s open interest.
If approved, SOL would join BTC and ETH as key components in the stablecoin’s treasury and help to build a strong foundation for its future.
Unlike traditional stablecoins such as Tether’s USDT or Circle’s USDC, USDe operates as a synthetic stablecoin, meaning it is not backed by fiat currency at a 1:1 ratio. Instead, USDe maintains its $1 value by collateralizing various stablecoins and utilizing a hedged cash-and-carry trade strategy.
This involves taking futures positions with substantial open interest, helping stabilize its value while a reserve fund manages risks in changing market conditions. Adding SOL to the mix will help in reducing potential selling pressures during market rallies, while boosting USDe’s annual percentage yield (APY).
If approved by Ethena’s independent Risk Committee, SOL will be gradually integrated into USDe’s collateral framework, with an initial allocation target of $100-200 million. This amount would represent about 5-10% of SOL’s open interest, mirroring USDe’s existing stakes of 3% in Bitcoin (BTC) and 9% in Ethereum (ETH).
Additionally, the proposal includes the potential use of liquid staking tokens (LSTs) like BNSOL and bbSOL, similar to Ethena’s current approach with ETH LSTs, which constitute one-third of its ETH holdings.
Recently, Ethena Labs allocated $46 million of its USDe reserve fund for tokenized real-world asset investments in various projects, including BlackRock’s BUIDL, Mountain’s USDM, Superstate’s USTB, and Sky’s USDS. This aligns with the growing trend in decentralized finance (DeFi) toward generating yield from asset-backed tokens.
