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Ethena's ENA Soars 8%, Bybit Boosts USDe for Futures

Ethena's ENA soars 8% as Bybit adopts USDe token, enhancing DeFi and CeFi bridge with new trading utilities.

By Max Weldon

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5/7, 13:05 EDT
Bitcoin / U.S. dollar
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Key Takeaway

  • Ethena's ENA surged 8% as Bybit integrates USDe for derivatives trading, marking a significant bridge between CeFi and DeFi.
  • USDe's addition as collateral on Bybit enhances perpetual futures trading, reducing risk with its embedded short position.
  • Ethena's innovative use of ETH and BTC in "cash and carry" trades for yield generation attracts over $2 billion in deposits.

Ethena's ENA Surges on Bybit Integration

Decentralized finance (DeFi) protocol Ethena's governance token, ENA, experienced a significant price surge following the announcement that crypto exchange Bybit has integrated Ethena's USDe "synthetic dollar" for various trading activities. This move not only expands the token's utility but also marks a pivotal moment for Ethena in bridging the gap between centralized finance (CeFi) and DeFi. Bybit's integration includes adding USDe as a collateral asset for perpetual futures trading with leverage and listing spot bitcoin (BTC) and ether (ETH) trading pairs against the token. Following the news, ENA reached its highest price in two weeks, peaking at $0.96, and recorded an 8% increase over the past 24 hours, outperforming the CoinDesk 20 Index (CD20), which remained mostly flat.

Bybit Enhances Ethena's Market Position

Bybit's decision to accept USDe as a collateral asset significantly enhances Ethena's market position, making it a more integral part of the bridge between CeFi and DeFi. Joshua Lim, co-founder of derivatives dealer company Arbelos, highlighted the importance of this integration, noting that it reduces risk for perpetual traders since USDe carries an embedded short position in itself. This strategic move by Bybit could potentially attract more users to both the exchange and Ethena's protocol, leveraging the utility and flexibility of USDe in trading activities.

Ethena's Growing Influence in DeFi

Ethena has rapidly become one of the fastest-growing DeFi protocols this year, with its tokenized yield-generating investment offering attracting over $2 billion in deposits. The protocol's innovative approach to generating steady yields through its USDe token, often referred to as a "synthetic dollar" rather than a stablecoin, has garnered attention. By using ETH liquid staking derivatives and pairing them with an equal value of short ETH perpetual futures positions, Ethena has managed to keep USDe anchored at a $1 price through a "cash and carry" trade strategy. This method harvests derivatives funding rates for yield, demonstrating Ethena's sophisticated financial engineering capabilities. The recent addition of BTC to its backing assets and the debut of its governance token, ENA, further underscore the protocol's ambition and growth trajectory.

Street Views

  • Joshua Lim, Arbelos (Bullish on Ethena and USDe):

    "Bybit's move to accept USDe as collateral asset makes Ethena even more of a bridge between centralized finance (CeFi) and decentralized finance (DeFi)... [This] is actually a huge deal."