The community behind Ethereum’s (ETH) synthetic dollar protocol is proposing to add ETH’s top rival to the stablecoin’s reserve assets.
According to a new Ethena (ENA) community proposal, the community is considering adding Solana (SOL) as a reserve asset for the USDe-pegged stablecoin USDe.
“This proposal recommends allocating USDe support to SOL using substantially the same hedging mechanism as Ethena currently in place on BTC and ETH perpetual futures.
The proposed allocation will be expanded slowly in consultation with the risk committee given the short trading history of SOL Perpetual Futures, low liquidity and limited historical funding rate data. ”
The proposal would also add liquid stake variants of SOL, such as Binance Liquid Staked SOL and Bybit Liquid Staked SOL (bbSOL), to the diversified cache of USDe reserves.
Additionally, the proposal aims to unlock billions of dollars in open interest.
“In addition to the potential increase in protocol revenue from SOL’s funding interest, this will free up $2-3 billion of additional open interest, allowing Ethena to continue expanding USDe from its current supply of approximately $2.5 billion,” We will be able to respond to potential increases in market demand.”
ENA is trading at $0.419 at the time of writing, up 18.5% in the past 24 hours.
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