Introducing iUSDe: A New Synthetic Dollar Product
In a bid to attract traditional finance (TradFi) institutions, blockchain platform Ethena is set to launch its new crypto-based product, iUSDe, in February. This innovative product is built on top of Ethena’s existing synthetic dollar, sUSDe, and aims to simplify the experience for users while maintaining the benefits of a stablecoin.
What is iUSDe?
iUSDe introduces a "simple wrapper contract" that adds transfer restrictions at the token level, according to Ethena’s 2025 roadmap published on January 3. This means that users can still enjoy the benefits of sUSDe while having more control over their funds.
Ethena’s Primary Goal for Q1 2025
The primary goal for the first quarter of 2025 is to collaborate with TradFi distribution partners to make iUSDe accessible to their clients. Ethena plans to announce these partners by the end of January, which will enable users to access this new product.
Target Audience
The main target audience for iUSDe includes asset managers, private credit funds, exchange-traded products, private investment trusts, and prime brokers. These institutions are likely to be attracted to iUSDe due to its yield-bearing potential and stability.
Synthetic Dollar’s Performance
Ethena’s sUSDe has already gained significant traction, offering a 10% annual percentage yield (APY) to over 368,000 investors who have invested more than $5.85 billion in the synthetic dollar. This demonstrates the appetite for stablecoins among users and institutions alike.
Why iUSDe is Attractive to TradFi Institutions
A yield-bearing synthetic dollar like iUSDe has the potential to attract significant attention from TradFi participants. The fixed-income markets, which are the largest liquid investment class in the world, have a size of $190 trillion. This means that the demand for a stablecoin with yield-generating potential could be "several orders of magnitude larger than the entire crypto market combined, including Bitcoin," according to Ethena’s roadmap.
How iUSDe Generates Yield
Ethena’s synthetic dollar generates yield via staking returns and shorting Ether (ETH) perpetual futures contracts. This approach allows users to earn a steady income while maintaining the stability of their funds.
Background on Ethena
Ethena has already made significant strides in the crypto industry, becoming the second-fastest protocol to surpass the $100 million revenue milestone in crypto history. It took Ethena 251 days to generate its first $100 million revenue, compared to second place, memecoin launchpad Pump.fun, which surpassed the milestone in just 217 days.
iUSDe’s Potential Impact
The introduction of iUSDe could disrupt TradFi markets by providing a yield-bearing dollar product that is more stable and secure than traditional investments. With its simple wrapper contract and transfer restrictions, iUSDe has the potential to attract significant attention from institutions and users alike.
Conclusion
Ethena’s new crypto-based product, iUSDe, has the potential to revolutionize the way TradFi institutions interact with cryptocurrency markets. By providing a yield-bearing dollar product that is both stable and secure, Ethena is poised to make a significant impact on the industry. As the launch of iUSDe approaches in February, users and institutions alike should keep a close eye on this exciting new development.
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