On August 7th, Ethena Labs announced the launch of their stablecoin, USDe, on the Solana network. This move allows borrowers to use Solana's native token, SOL, as collateral for USDe loans, pending approval from Ethena (ENA) token holders. The integration also extends to several Solana-based applications, including Kamino Finance, Orca, Drift, and Jito.
Previously exclusive to the Ethereum network, USDe allowed loans to be collateralized with Ether (ETH) or Bitcoin (BTC). Ethena Labs shared the news of the Solana launch on the X social media platform, stating, “USDe is live on Solana as of today, August 7th.”
USDe is designed to maintain a peg to the US dollar and is backed by Lido Staked Ethereum (stETH) and short positions in the Ethereum perpetual futures market. This setup generates yield from Ethereum staking rewards and negative funding rates on its short positions.
The stablecoin is now integrated with decentralized finance protocol Kamino Finance and decentralized exchanges Orca and Drift Protocol. It will also be available on the restaking protocol Jito once it becomes operational.
Users can earn Ethena Sats, which are convertible to ENA at the end of each campaign, by providing liquidity to the integrated exchanges or using USDe as collateral for margin trades.
Ethena Labs anticipates a vote next week to determine whether SOL will be approved as collateral for USDe loans. Although the protocol won't immediately start shorting SOL, it may do so in the future as more funding rate data becomes available. "Subject to governance, Ethena will scale slowly into SOL as funding is monitored," the announcement noted.
Proponents of USDe highlight its high yield and relative safety compared to competitors like USD Coin (USDC) and Tether (USDT). However, some critics argue that its yield is unsustainable in the long term. Ethena Labs founder Guy Young has defended the coin, asserting that its yield is “publicly verifiable” and derived from legitimate revenue sources.
