The Ethena Labs community will shortly vote on a proposal to incorporate Ethereal, a decentralized exchange built on the Ethena Network, into its reserve management system.
This integration aims to increase the “utility and demand” of USDe, a synthetic stablecoin developed by Ethena Labs.
“Fells0x” submitted the proposal on Sept. 30, which requests authorization for Ethereal to oversee spot and perpetual futures positions that support USDe. Upon the proposal’s approval, proprietors of Ethena tokens will be entitled to 15% of any future Ethereal governance tokens.
The proposal states that Ethereal V1, anticipated to be launched on the testnet in Q4, is designed to provide centralized exchange-level performance while preserving “complete self-custody.” The exchange’s architecture will be “capable of processing 1 million operations per second with sub-20ms latency,” as per the proposal.
Also included in the proposal are potential future synergies, such as decentralized lending and borrowing applications constructed on top of USDe.
“Ethereal’s launch will provide the blueprint for other applications built using USDe on the Ethena Network, helping to drive Ethena’s transformation from an asset issuer to a platform for financial innovation.”
Fells0x
The proposal is in response to Ethena’s recent announcement of UStb, a stablecoin backed by BlackRock intended to resolve community concerns regarding USDe.
The BlackRock USD Institutional Digital Liquidity Fund and private lender Securitize supported the introduction of UStb as a precaution against systemic risks in negative funding rate scenarios.
In the past, individuals such as Andre Cronje had expressed apprehensions about USDe, comparing it to the defunct TerraUSD. Nevertheless, Ethena has maintained that no such dangers have arisen in USDe’s more than six-month operation.
Fells0x has requested technical support from the Ethena Foundation and Risk Committee to ensure the seamless integration of Ethereal into Ethena’s hedging strategies, which is pending approval. Although no specific timetable has been established, the vote is anticipated to occur shortly.
