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This week, Ethena was in the spotlight after the airdrop of ENA, its new governance token. Ethena’s flagship product, the “synthetic dollar” USDe has amassed a $2 billion market cap in less than two months. Meanwhile, ENA’s market capitalization sits around $1.4 billion, with a fully diluted valuation of $15.5 billion.

In this episode, Guy Young, founder of Ethena Labs, discusses the risks associated with Ethena, including custodial risks and counterparty risks to exchanges. Young also talks about the use cases of Ethena’s governance token, and discusses the potential for Ethena to be integrated with DeFi and CeFi.

Show highlights:

  • An introduction to what Ethena is and how USDe works
  • Why the team doesn’t want to refer to USDe as a stablecoin, and prefers to use the term “synthetic dollar”
  • What the risks of USDe are, including custody, counterparties, and smart contracts
  • Why Guy is “pleased” with how the ENA airdrop went through
  • How ENA will be used and what its role will be in the governance of Ethena
  • Why Ethena is now onboarding Bitcoin as collateral
  • Why Guy thinks that there’s been an “exaggeration” regarding the situation with Maker and Aave
  • Guy’s response to the critics who say that Ethena is essentially Terra/Luna
  • Whether USDe would only work in a bull market
  • How the Ethena insurance fund works and what it aims to accomplish
  • What’s next for Ethena after onboarding Bitcoin, with Solana potentially being the next asset

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Episode Transcript





MakerDAO/Aave controversy: 

Comparisons to Terra’s UST: