Algorithmic stablecoin developer raises $6 million
Date: 2023-07-18 Author: Karina Ziganova Categories: BUSINESS, IN WORLD
Cryptocurrency startup Ethena, developing a project inspired by Arthur Hayes, has attracted investment from Dragonfly Capital
Crypto startup Ethena has raised $6 million in investment from venture capital firm Dragonfly Capital. This is reported by Axios with reference to the company. The terms of the investment are not disclosed. The list of Ethena investors also includes the Deribit, Bybit, OKX, Gemini and Huobi exchanges.
Ethena is developing USDe, an algorithmic stablecoin that maintains the exchange rate pegged to the US dollar through collateral from users. The funds are used to hedge risks by placing short positions on ether (ETH) through perpetual swaps.
Ethena founder Guy Yang said in an interview with the media that the project wants to develop a cryptocurrency solution that would exist outside the banking system. Yang added that the project is inspired by the NakaDollar stablecoin project, which BitMEX founder Arthur Hayes proposed as an alternative to the failed stablecoin terraUSD (TUSD).
Recall that in March 2023, Hayes proposed the creation of a new stablecoin based on bitcoin derivatives. Then the founder of BitMEX explained that in order to maintain 1:1 parity with the US dollar, the peg must be carried out through mathematical transactions between a decentralized autonomous organization (DAO), NakaDAO. At the same time, Hayes admitted that not all projects (including stablecoins) need full decentralization.
Cardano founder Charles Hoskinson believes that algorithmic stablecoins will help realize Satoshi Nakamoto's vision of Bitcoin. According to him, traditional banks will always let users down. Therefore, according to Hoskinson, algorithmic stablecoins are "the most important area of research for the full realization of the original vision of bitcoin."
