Ethena Converts USDe to AAV When “Asset Matures”


Stablecoins can now be borrowed into Ethena USDe or sUSDe by users who deposit stETH, weETH, ETH, and WBTC on Aave.

In order to further expand USDe’s reach in Decentralized Finance (DeFi), Ethena Labs—issuer of the fourth-largest stablecoin by market capitalization—has connected with Aave, the biggest lending platform in the sector.

The developers of Ethena have announced that users may now borrow stablecoins into Ethena USDe or sUSDe by depositing stETH, weETH, ETH, or WBTC on Aave, or by depositing USDe and looping their position with other stablecoins on Aave. Along with adding liquidity to Ethena, users will also have access to long-delta tokens like ETH.

Users may also earn Sats for a variety of benefits, such as 20x multiplier for USDe collateral, 10x for sUSDe collateral (which requires confirmation by a governance vote), and 10x for stETH, ETH, rETH, and weETH collateral to convert GHO into USDe.

It is considered permissible to onboard the asset with caps and put it into isolation mode after a quarter, according to Marc Zeller of the Aave Chan Initiative. He assured The Defiant that the neighborhood has no objections “at all,” and that the risk boundaries are reasonable.

When MakerDAO sparked a dispute in the DeFi community about adding USDe as collateral in early April, Zeller wrote a motion in the Aave governance forum to withdraw the collateral status of DAI on Aave. So, his statements come as a surprise.

Ethena has shown her dominance once again with the integration. People have been rushing to utilize the protocol and its stablecoin USDe, even though its yield-bearing design may cause temporary post-traumatic stress disorder (PTSD) because to its unusual combination of native staking returns and average financing provided to shorts.

In terms of market value, USDe has swiftly climbed the rankings and is now the fourth most valuable stablecoin. The last 30 days have seen a 42% increase, taking it from $2.2 billion to $3.2 billion.

Ethena has access to the biggest lending environment in the business by becoming a member of Aave. With $13.2 billion in TVL, Aave controls 35% of the market, says DefiLlama.

The Ethena team discussed today on X how the USDC borrow rates for Aave “compare well” to the borrow charges seen on the MorphoLabs USDe and sUSDe vaults, suggesting that USDC might be a more cost-effective way to get exposure to leverage. At the moment, the interest rate for USDe on Morpho is 15.4% while the rate for USDC on Aave is 12.8%

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