Ethena introduces USDe stablecoin on public mainnet with Shard Campaign to boost engagement. Rewards for contributions and compliance emphasized.
Recently, Ethena gained significant attention across various social media platforms following its announcement of the USDe stablecoin launch on the public mainnet. Alongside this, the company unveiled an innovative Shard Campaign aimed at enhancing user engagement within its ecosystem.
With a focus on cultivating a vibrant community, Ethena has introduced a reward system for user contributions, marking a departure from traditional incentive models. The Shard Campaign, structured into short-duration seasons called "Epochs," is designed to encourage sustained involvement.
Each Epoch of the campaign promotes various activities related to the USDe stablecoin and community integration. The campaign will either conclude within three months or upon reaching a $1 billion USDe supply. Participants are rewarded for diverse contributions, including liquidity provision in USDe Curve pools and minting with different stablecoins, all aimed at enhancing liquidity and fostering ecosystem growth.
A notable aspect of the Shard Campaign is its decay mechanism, which gradually reduces the Shards awarded over time. This mechanism incentivizes early participation for greater rewards and targets users committed to contributing to Ethena's long-term success. Certain jurisdictions, such as the US, may face restrictions on participation.
Ethena has underscored its commitment to regulatory compliance, ensuring that both its synthetic dollar, USDe, and its staked version, sUSDe, operate within legal frameworks. The company has revealed that USDe is backed by staked ETH and short ETH hedges, serving as a vital liquidity source for Automated Market Makers (AMMs) and order books in Centralized Exchanges (CEXs). Concurrently, sUSDe offers an opportunity for value accrual, benefiting from the underlying staking and hedging activities associated with USDe.
The launch of USDe follows a successful funding round where Ethena secured $14 million from Dragonfly and other prominent investors, including Bybit, OKX, Deribit, and Gemini. This funding complements a previous $6 million investment round, supported by major industry players like Binance, aimed at bolstering the development of decentralized finance solutions on the Ethereum platform.
The injected capital is earmarked to support USDe, which employs delta-hedging strategies and has already locked over $289 million in value since its December launch. Differing from traditional stablecoins, USDe utilizes financial derivatives to maintain its peg to the U.S. dollar, offering a novel approach to value stability in the digital currency market.
Ethena's foray into the stablecoin market, particularly focusing on synthetic dollars rather than conventional stablecoins, positions it strongly within the expansive $130 billion stablecoin sector. Historically, issuing stablecoins has proven lucrative for issuers, who benefit from interest earned on reserve assets without passing these earnings on to holders. This dynamic is exemplified by Tether, the market's largest issuer, which reported a profit of $2.85 billion in the fourth quarter.