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On Wednesday, Ethena Labs, the team responsible for the yield-bearing stablecoin project USDE, revealed its expansion to the Solana blockchain. This move brings USDE to the distributed ledger, with SOL now also being used as part of the stablecoin’s reserve backing.
USDE Stablecoin Project Extends to Solana, Includes SOL Backing
Despite witnessing redemptions totaling around $300 million in under two weeks, Ethena Labs proceeded with the Solana integration. “August 7th marks Ethena’s Solana integration,” Ethena Labs said on X. “USDE deployed on Solana thanks to Layerzero Labs OFT [and] SOL onboarded as a backing asset for USDE, subject to governance.”
Ethena is also launching a “Solana Sats Campaign.” “SOL as a backing asset for USDE will be proposed to governance for implementation next week and opens up an extra $2-3bn of open interest across major exchanges, improving USDE’s scalability even further,” Ethena stated. The team also noted that pending a governance vote, Ethena plans to gradually increase its involvement with SOL.
“SOL perps began trading later and have less historical data on funding rates,” Ethena concluded. “But YTD in 2024 SOL funding has outpaced both BTC and ETH, even after the latter two assets had ETFs launched. Subject to governance, Ethena will scale slowly into SOL as funding is monitored.”