Coinbase and Ethena's partnership is moving into the implementation phase. Coinbase Ventures has purchased ENA on the secondary market, and the two companies plan to launch their first collaborative project next week, bringing on-chain savings and financial products to Coinbase's more than 100 million users.
The first collaborative project will be launched next week.
Ethena stated that the partnership will focus on on-chain finance and savings services. Founder Guy Young said that the integration, launching next week, will mark the first time Ethena products are available to a large number of Coinbase users.
Coinbase also disclosed that it is currently Ethena's primary custodian, wallet service provider, and perpetual contract trading venue. Under the existing arrangement between the two parties, Ethena's yield token, USDe, will be distributed on the Coinbase network and within the broader Coinbase ecosystem.
Following the announcement, Ethena's governance token, ENA, initially surged by approximately 20%, before giving back some of its gains. As of the time of the report's publication, ENA is still up about 3% in the past 24 hours, while the overall crypto market weakened during the same period.
Ethena seeks to expand its distribution channels.
This investment is seen as a direct endorsement of Ethena by Coinbase. Ethena has experienced rapid growth in the past, primarily generating returns for its holders through synthetic dollars and derivatives funding strategies.
The protocol's asset size reached approximately $15 billion at its market peak last October, before subsequently declining to around $5.3 billion as the market retreated and returns decreased. This integration with Coinbase is seen by the market as a step for Ethena from its native DeFi user base to a broader crypto brokerage platform.
Some investors believe this partnership could connect Coinbase's approximately $19 billion USDC ecosystem with Ethena's yield infrastructure. If sUSDe yields are higher than the base rate for USDC, Coinbase could potentially offer higher USDC lending rates, while Ethena could gain access to deeper funding sources.
Simultaneously expand institutional lending cooperation
In addition to its retail offerings, Ethena is also expanding into the institutional market. The agreement was announced on the same day, extending its partnership with crypto bank Anchorage Digital to support institutional lending.
As arranged, Anchorage will manage the collateral in Ethena loan investments through the Atlas platform. Borrowers can continue to keep their assets within the custody system without having to transfer them on-chain. This structure is primarily geared towards institutional clients requiring compliant custody and internal controls.
Anchorage has a prior partnership with Ethena. Anchorage Digital Bank is also one of the issuers of Ethena's stablecoin USDtb in the United States.
Additional information:The report mentions that the US Congress is still debating the CLARITY Act, a bill that structurates the crypto market. Ethena believes that if the bill proceeds, the conditions for the expansion of on-chain native dollar assets like USDe may improve.
