Ethena Labs Proposes Adding SOL Token as Collateral for USDe Stablecoin
Ethena Labs, the development team behind the synthetic stablecoin USDe, has submitted a new proposal to its community: adding the Solana blockchain’s SOL token to its collateral mix.
If approved, SOL would join assets such as Bitcoin (BTC) and Ethereum (ETH) as collateral, further diversifying the treasury that supports the stability of the USDe stablecoin.
USDe maintains its parity with the dollar primarily through hedged trades and active reserve management, unlike traditional stablecoins backed by fiat reserves.
USDe: A Different Approach to Traditional Stablecoins
USDe sets itself apart from traditional stablecoins like Tether’s USDT or Circle’s USDC, which are backed by fiat reserves held at a 1:1 ratio. In contrast, USDe is a synthetic stablecoin. Its parity with the US dollar is maintained not through deposits of fiat currency, but through a range of strategies including the use of collateral, hedged trades, and active reserve management to mitigate market fluctuations.
This innovative approach allows USDe to adapt to volatile market conditions by relying on strong reserves and positions with a large open interest in futures. This ensures that the stablecoin’s value remains stable even in unstable financial environments.
The Potential Integration of SOL
The current proposal from Ethena Labs aims to include SOL among USDe’s collateral assets. If approved by the risk committee, an independent entity from Ethena Labs, the integration of SOL would be phased in gradually, with an initial allocation of $100 to $200 million in SOL positions. This would represent approximately 5 to 10% of SOL’s open interest, following a similar logic to USDe’s current exposure to Bitcoin (3% of total open interest) and Ethereum (9%).
In addition to SOL, the proposal also explores the use of liquid staking tokens (LSTs) such as BNSOL and bbSOL, similar to what Ethena already does with LSTs on Ethereum, which currently make up one-third of its ETH allocation. This diversification would optimize yield while maintaining the security and liquidity of collateral assets.
The DeFi Trend Toward Tokenized Real Assets
Ethena Labs is not limited to digital assets to stabilize its stablecoin. In fact, the company recently allocated $46 million from its reserve fund to investments in tokenized real assets, a growing sector in decentralized finance.
These investments include products like BlackRock’s BUIDL, Mountain’s USDM, Superstate’s USTB, and Sky’s USDS (formerly MakerDAO). This strategy aligns with a broader trend in the DeFi world, where yield-generating assets backed by tokens play an increasingly important role.
