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Ethena’s rise has triggered a credit standing showdown inside DeFi. MakerDAO, a distinguished stablecoin issuer, lately accepted a proposal to simply accept $100 million of USDe as collateral to borrow DAI. MakerDAO eyes elevating this restrict to $600 million, with a staggering $1 billion on the horizon. At present, USDe lending backs solely 2% of DAI’s provide, but these loans yield 36% yearly, contributing to 10% of Maker’s potential 2024 revenues.
Some protocols understand Ethena as a looming risk to DeFi’s stability. Aave, a number one lending protocol, is considering proposals to strip DAI of its collateral standing. Rumors counsel strategic motives, with Aave presumably aiming to carry again competitors from Ethena’s stablecoin, GHO.
Ethena’s worthwhile good points entice traders, however questions stay over its related dangers. Regardless of its profitability, can these dangers be successfully managed? The true litmus check for Ethena and related protocols could solely come up in a bear market situation.
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