Ethena will integrate USDe into Coinbase's USD savings product. Ethena founder Guy Young stated that the integration is expected to launch next week, marking the first time Ethena products will be available to Coinbase's more than 100 million users.
Launching next week and reaching a larger user base.
According to Guy Young, this partnership will utilize USDe for idle USD balances on the Coinbase platform and generate direct returns on these funds. Coinbase also purchased ENA, the native token of the Ethena protocol, from the open market as part of the collaboration.
Following the announcement, ENA showed significant strength, rising against the trend of a generally weak market, with intraday gains approaching 28% at one point.
USDe is closer to a yield-generating US dollar product.
Although USDe is often categorized as a stablecoin, it is actually positioned closer to a yield-generating USD product. The article states that this type of product is more directly comparable to on-chain USD instruments that offer interest returns, rather than stablecoins simply used for payments or transfers.
USDe's returns primarily come from a neutral hedging strategy. This model relies on the funding rate environment in the crypto market, so its attractiveness is significantly affected during market downturns. As the market cooled since October of last year, Ethena's total value locked (TVL) fell from nearly $15 billion to approximately $4.2 billion, with redemption pressure being one of the dragging factors.
Low funding rates dragged down previous expansion.
The article notes that in a low funding rate environment, the profit potential of the strategies Ethena relies on has narrowed, leading to a slowdown in growth. Meanwhile, some competing products offer higher returns with lower risk, further weakening demand for USDe.
Against this backdrop, Ethena has recently been trying to expand its yield strategy from the crypto-native market to broader areas such as tokenized assets in order to find new growth opportunities.
From a market perspective, ENA rose from approximately $0.08 to around $0.10 after the news was released. However, whether this upward trend can continue depends on the actual effectiveness of the Coinbase partnership and the liquidity of USDe in the new scenarios.
