Bitwise President Teddy Fusaro Reviews Ethena (USDe) Protocol: Is It the Next Stablecoin Hype Train?

The latest stablecoin making waves in the cryptocurrency world is Ethena (USDe), and Bitwise President Teddy Fusaro is taking notice. In a recent Twitter thread, Fusaro highlighted the rapid growth of USDe, calling it potentially the fastest-growing USD-denominated asset in crypto history.

Bitwise, known for its crypto funds including a popular Bitcoin spot ETF, has no investments in Ethena. However, Fusaro took the time to review the protocol’s mechanics and structure. USDe operates similarly to an ETF, with a protocol that accepts contributions from authorized participants (APs) and issues USDe tokens. The protocol then invests in a portfolio consisting of Bitcoin, Ethereum, ETH liquid staking tokens, and Tether USDT, balanced by short perpetual futures exposure to maintain a dollar-denominated value over time.

One unique feature of USDe is that holders receive yield generated by the reserves, which can be further increased by staking USDe to receive sUSDe. Fusaro noted that the potential interest at scale could be massive, making it a significant total addressable market.

Compared to traditional stablecoins like USDT and USDC, which are backed by centralized reserves, USDe offers a different approach to generating yield for holders. While USDe carries its own risks, including exchange counterparty risk and smart contract risk, Fusaro believes that any potential depegging or unwinding of USDe would not mirror the collapse seen in TerraUSD in 2022.

With a market cap of $2.36 billion, USDe has quickly risen to become the fourth-largest stablecoin in circulation, showcasing its rapid growth and support within the crypto community. While the future success of USDe remains uncertain, its recent achievements have certainly caught the attention of industry experts like Teddy Fusaro.