Portuguese startup Ethena garners US$6M in funding from DragonFly, Huobi for stablecoin development
Ethena, a blockchain startup for Ethereum-backed stablecoins, has reportedly secured US$6 million in a seed funding round. Axios reported on Monday that Dragonfly Capital, a leading Web3 venture firm, led the startup’s funding round. Other prominent investors to back Ethena in the round were crypto platforms Deribit, Bybit, Gemini, OKX, and Huobi. The stablecoin developer also received backing from BitMEX founder and former CEO Arthur Hayes.
“USDe is the first decentralized, scalable, and stable asset with returns derived from the economic activity of Ethereum and futures markets. Ethena distributes collateral to a diverse set of secure, programmable, and transparent on-chain MPC custodial contracts. The Ethena native money markets will further enable minting of USDe against liquid staking tokens to allow users to maintain long exposure to Ethereum while generating USD liquidity,” information available on Ethena’s official website has said.
The Benefits of Using Stablecoins
Because they are so easily transferred between crypto and fiat markets, stablecoins enjoy low volatility and very high liquidity. One of crypto’s first stablecoins, USDT (Tether), has been so reliable and stable that in 2021 more than 75% of Bitcoin trading was done using USDT.
This high liquidity and usefulness bring even more stability to crypto investors in an otherwise highly volatile market. But that’s not all that stablecoins can do. These versatile digital assets come packed with various additional features and benefits. Here are just a few:
Stablecoins can be a safe-haven asset. For this, you would want to consider a stablecoin backed by something other than USD, especially if you want to shield your wealth during a market downturn. Commodities and precious metals like gold have historically been sought-after “safe-haven” assets during high volatility.
In the past, investors considered physical gold the favored safe haven. In modern times, physical gold still has its place. Still, a stablecoin backed by gold provides both the comfort of owning gold plus the added benefits of increased usability, liquidity, and stability.
Borderless payments are possible with stablecoins since they connect to global, in-real-time crypto markets. Remittances, payments sent home by a worker living in another country, are cheaper, faster, and more convenient when using stablecoins.
One challenge for global companies is how to pay employees from diverse regions. As remote work becomes more common, employers may access a global pool of employees, but how do they efficiently pay their staff when employees reside in a myriad of countries? Using stablecoins to pay them makes sense in our digital economy.
Gaining access to the wide world of crypto markets is another huge plus for stablecoins. If you own stablecoins, you can easily transfer them to other digital assets should you wet your feet in DeFi applications, participate in an Initial Exchange Offering (IEO), or join a meme competition on Twitter for crypto prizes.
