Markets News Report
March 12, 2024

Ethena Labs Implements Shard Reductions as USDe Stablecoin Supply Exceeds $900M

In Brief

Ethena Labs announced the implementation of shard reductions following its USDe stablecoin supply exceeding $900 million.

Ethena Labs Implements Shard Reductions as USDe Stablecoin Supply Exceeds $900M

Decentralized finance platform Ethena Labs, the developer behind the USDe stablecoin, announced the implementation of shard reductions following the USDe supply exceeding $900 million.   

The adjustments included reducing the shard multiplier for Curve LP positions, decreasing from 20x to 15x. Furthermore, the shard multiplier for holding USDe outside an eligible pool has also been reduced from 5x to 2x. These reductions equate to an approximate daily decrease of 1 billion shards, representing around 12% fewer shards daily.

As all shard pools near full capacity, upcoming shard integrations this week will encompass Layer 2s, Cross Chain, Money Markets, and Leverage Protocols.

According to Ethena Labs, users can acquire USDe on various Layer 2 platforms, such as Injective, to earn shards, with a 7x shards per day reward for USDe held or 1x for sUSDe held. Injective integration is live, enabling users to use the USDe-USDT vault to acquire USDe or LP and earn shards. Moreover, Manta & Mantle integrations, scheduled for this week, will allow users to earn shards in a similar fashion and ratio by swapping into USDe on the Layer 2 platforms. Users on Manta will also have the option to lock USDe with a 7-day cooldown for unlocking, earning 10x shards per day for the locked USDe.

Users will also have the option to utilize USDe as a collateral asset in protocols such as Morpho, Gearbox, and Ajna for 7x shards once these protocols go live later this week or sUSDe can be used as a collateral asset for 3x shards. 

The shard campaign will run for three months or until the USDe supply reaches $1 billion. Regardless of whether the USDe hits the $1 billion supply or not, the conclusive date for the entire shard campaign is set for April 1st.

Ethena Labs Advances USDe Stablecoin Development 

Ethena Labs focuses on the development of the USDe stablecoin, which operates on the Ethereum platform and is collateralized by derivatives. The USDe strategy for price stability involves “delta-neutral” hedging across centralized and decentralized platforms. USDe is supported by combining a long-staked Ethereum (ETH) position and a short ETH position.

After gaining support from Binance Labs through its Season 6 incubation program earlier this year, Ethena Labs raised $14 million in a seed extension funding round led by DragonFly, Bybit, OKX, Deribit, and Gemini, among other supporters, with the funds earmarked for team expansion, including the recruitment of quantitative engineers and business development executives in the Asian region.

Since its launch, USDe has garnered substantial inflows and witnessed a surge in popularity, prompting Ethena Labs to introduce several deposit pools due to the existing one reaching its capacity. The project’s total value locked (TVL) has steadily increased, reaching $922.5 million, with over $580 million added within the last month since the platform became accessible to the public. 

With these adjustments, the USDe stablecoin evolves in response to the growing demand, signalling adaptability and progress.

Disclaimer

In line with the Trust Project guidelines, please note that the information provided on this page is not intended to be and should not be interpreted as legal, tax, investment, financial, or any other form of advice. It is important to only invest what you can afford to lose and to seek independent financial advice if you have any doubts. For further information, we suggest referring to the terms and conditions as well as the help and support pages provided by the issuer or advertiser. MetaversePost is committed to accurate, unbiased reporting, but market conditions are subject to change without notice.

About The Author

Alisa, a dedicated journalist at the MPost, specializes in cryptocurrency, zero-knowledge proofs, investments, and the expansive realm of Web3. With a keen eye for emerging trends and technologies, she delivers comprehensive coverage to inform and engage readers in the ever-evolving landscape of digital finance.

More articles
Alisa Davidson
Alisa Davidson

Alisa, a dedicated journalist at the MPost, specializes in cryptocurrency, zero-knowledge proofs, investments, and the expansive realm of Web3. With a keen eye for emerging trends and technologies, she delivers comprehensive coverage to inform and engage readers in the ever-evolving landscape of digital finance.

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