Ethena Labs Launches Epoch 2 for USDe Stablecoin

Ethena Labs, the developer of USDe, a synthetic dollar stablecoin, announced that it will launch the second phase of its token distribution campaign, Epoch 2, on February 26, 2024. The announcement comes after a successful first phase, Epoch 1, where USDe supply grew by over $440 million in five days, with $100 million of liquidity added to Curve Pool, a decentralized exchange for stablecoins.

What is USDe?

USDe is a novel stablecoin that aims to provide a censorship-resistant and scalable synthetic dollar for the decentralized finance (DeFi) ecosystem. Unlike other stablecoins that are backed by fiat currencies, commodities, or smart contracts, USDe relies on a delta-hedging mechanism that uses ETH as collateral to maintain the dollar peg. Delta-hedging is a technique that adjusts the exposure of an asset to changes in its price, by using derivatives such as options or futures.

USDe is designed to be compatible with existing DeFi protocols and platforms, such as Curve, Aave, Maker, and Pendle. Users can earn interest, borrow, lend, and trade USDe with other stablecoins or tokens. USDe also has a governance token, called Shard, that allows holders to participate in the decision-making process of the protocol.

What is Epoch 2?

Epoch 2 is the second phase of Ethena Labs’ token distribution campaign, where users can earn Shard tokens by interacting with USDe in various ways. Epoch 2 will have three separate components:

  • Raising the caps on sDAI<>sUSDe and adding GHO<>USDe pool on Curve. Users who provide liquidity to these pools can then lock their Curve LP tokens via Ethena’s frontend to continue to accrue 20 Shards per day, for each LP token. Note that for the new cap on the sDAI<>sUSDe Curve pool, only single side sDAI deposits will be eligible for Shards.
  • Raising the USDe lock cap from $100 million to $200 million. Users who lock USDe via Ethena’s frontend will continue to receive 10 Shards per day, for each USDe locked. This cap may be increased further during this Epoch, but is not guaranteed to increase.
  • Pendle: users will be able to deposit USDe up to a cap within Pendle Finance, a platform that enables users to trade future yield, and receive Shard rewards. Once this cap is filled for USDe, Ethena Labs will add additional Pendle pools for sUSDe, a synthetic version of USDe that can be minted by staking USDe. Further details will be provided alongside the Pendle team this week.

Epoch 2 is additive to Epoch 1, meaning that users who are receiving Shards from Epoch 1 will continue to receive the same amount of Shards as the campaign progresses. To recap, the current Shard rewards per day for Epoch 1 are:

  • 20 Shards per day for providing liquidity in Curve and locking in Ethena
  • 10 Shards per day for locking USDe in Ethena
  • 5 Shards per day for simply holding USDe
  • 1 Shard per day for staking in sUSDe

However, users in certain jurisdictions will be restricted from accessing Ethena’s frontend to stake LP tokens and stake in sUSDe, due to regulatory reasons.

Why USDe Matters

USDe is a stablecoin that aims to change the DeFi landscape with its innovative and scalable design. By using delta-hedging and ETH as collateral, USDe offers a synthetic dollar that is resistant to censorship, manipulation, and volatility. USDe also enables users to access various DeFi opportunities, such as earning interest, borrowing, lending, and trading, with minimal fees and risks. USDe also has a governance token, Shard, that empowers users to shape the future of the protocol.

Ethena Labs is a team of experienced developers and researchers who are passionate about creating cutting-edge solutions for the DeFi space. With the launch of Epoch 2, Ethena Labs hopes to attract more users and liquidity to USDe, and to grow the community of Shard holders. Ethena Labs also plans to introduce more features and partnerships for USDe in the future, such as integrating with other DeFi platforms, launching a DAO, and supporting cross-chain interoperability.

You can use Ethena to earn point here.

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