Ethena Labs, the creator of the innovative “synthetic dollar” USDe, has recently unveiled plans for the launch of a decentralized crypto exchange to boost the growth of the asset. The proposed decentralized exchange, named Ethereal, is set to be integrated into Ethena’s existing network to enhance the utility and demand for USDe.
The proposal for Ethereal, put forward by community member Fells0x on September 30, outlines that the decentralized exchange will manage spot and perpetual futures positions supporting USDe. This move is expected to not only strengthen the utility of USDe but also drive increased demand for the synthetic dollar. If approved, 15% of future Ethereal governance tokens will be allocated to Ethena community members.
The first version of Ethereal is slated to launch on the testnet in the fourth quarter of 2024. The DEX aims to provide the speed and performance typically associated with centralized exchanges while ensuring that users retain full control of their assets. The proposal highlights that Ethereal will offer features such as cross-margin, liquidity automation, and portfolio margin.
Once operational, Ethereal is projected to handle up to 1 million transactions per second with sub-20ms latency. Additionally, the decentralized exchange plans to facilitate the development of more applications utilizing USDe, including decentralized lending and borrowing.
In response to the declining supply of USDe in the crypto market due to increased competition, this initiative is seen as a strategic move to maintain and potentially boost the asset’s value. While USDe was once one of the fastest-growing stablecoins, its market cap has decreased by over $1 billion in the last three months. Competition from other yield-generating stablecoins, such as PayPal’s PYUSD on Solana, has contributed to this decline.
Despite the challenges and market fluctuations, USDe has managed to maintain its peg to the dollar. The snapshot vote on the Ethereal proposal is set to take place later today, marking a significant step in the evolution of Ethena’s ecosystem.
Overall, the introduction of Ethereal and the ongoing developments within the Ethena network showcase the commitment to innovation and growth within the decentralized finance space. As the crypto market continues to evolve, initiatives like Ethereal are poised to play a crucial role in shaping the future of digital asset trading and management.