The Contango Podcast
This is the Contango Podcast, where we take you behind the scenes as we identify, diligence and discuss private investment opportunities at the bleeding edge of web3. We interview the founders, investors and researchers that are driving the industry forward. The podcast is hosted by Mike Grantis, co-Founder and Managing Director at Contango Digital Assets, a forward looking venture firm focused on building and investing in innovative companies that make web3 globally accessible.
The Contango Podcast
#19 | Ethena: Creating a New Era in Stablecoin with USDe
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Follow Ethena: @Ethena_Labs
Follow Conor: @ConorRyder
Hey, everyone. I'm excited to share with you my conversation with Connor Ryder, head of research at Ethena Labs. Ethena is solving one of the most pressing issues in Defi right now. They're developing a decentralized yield bearing stablecoin backed by Ethereum liquid staking token derivatives. Unlike Fiat backed stablecoins like USDC and USDT with opaque reserves, 0% yield sharing and unhedged regulatory and censorship risk.
USDe has 100% on chain auditable reserves with no inherent confiscation risk unlike over collateralized crypto native stablecoins like FRAX and DAI, USDe is capital efficient and offers yield from both Ethereum staking derivatives and exchange based arbitrage. The STABLECOIN is minted by opening up delta neutral positions through onboarding long lost reserves and shorting Ethereum Perpetuals with 1X leverage.
This creates a fixed price asset with added benefits of Ethereum staking yields alongside short arbitrage yield. The emergence of this digitally native decentralized dollar unlocks the power of the Internet bond, creating a yield curve that can be used to create permissionless on-chain savings products. The project has just raised a 6.5 million seed round led by Dragonfly Capital