Introduction: Ethena Labs Embraces Synthetix Integration
Ethena Labs, the innovators behind a decentralized stablecoin protocol built on Ethereum, has announced a strategic collaboration with the Synthetix platform. The aim is to establish a crypto-native solution for money that isn’t dependent on traditional banking systems. At the same time, Ethena Labs will offer a globally accessible and permissionless dollar denominated savings instrument dubbed the ‘Internet Bond’.
Synthetix Developments: Paving the Way for Ethena’s USDe
In the world of open interest and trading volumes, centralized exchange venues dominate. However, Ethena Labs sees potential in the Synthetix platform as a foundation for their core product: USDe. Synthetix v3’s improvements on funding mechanics and order execution have piqued Ethena’s interest, promoting the integration with the Synthetix liquidity layer.
Why Ethena Chose Synthetix: A Symbiotic Relationship
Ethena Labs and Synthetix share a common vision. The Synthetix platform offers deep onchain liquidity, access to Ethereum L1 liquidity, consistent funding, and the ability to use stETH collateral. Moreover, its decentralized, on-chain perpetual futures exchange aligns perfectly with Ethena’s transparency goals.
Ethena’s Offering to Synthetix: Boosting Liquidity and Driving Fees
With their ambition to create a stablecoin that scales into billions, Ethena Labs plans to bring hundreds of millions in volume to Synthetix. This flow will increase liquidity and drive fees to Synthetix stakers.
USDe: The Potential as a Permissionless Asset in Synthetix v3
The rollout of Synthetix v3 opens the door for governance to vote on new collateral types backing sUSD. Ethena’s USDe can become a unique collateral asset, providing a stable, yield-bearing asset that can essentially be used as a wrapping asset to capture yields within sUSD.
What’s Next for Ethena Labs: Towards a Stable Crypto-native Solution
In the next quarter, Ethena Labs will begin internal testing for the delta-neutral USDe. As the testing phase progresses, the integration with Synthetix perpetuals will ensure smooth execution of hedging positions. Once released, Ethena will use Synthetix perps for hedging, marking the first step in creating a censorship-resistant, scalable, and stable crypto-native solution for money.