Ethena Labs Proposes sUSDe Integration with World Liberty Financial

Ethena Labs has submitted a proposal to integrate its staked synthetic dollar, sUSDe, with World Liberty Financial, a decentralized finance (DeFi) protocol endorsed by President-elect Donald Trump. The proposal aims to add sUSDe to World Liberty Financial’s upcoming Aave instance, which would make the staked stable token a core collateral asset for users.

Understanding sUSDe and USDe

Ethena sUSDe is the staked version of its USDe coin, a synthetic dollar backed by leveraged positions underpinned by cryptocurrencies like Bitcoin and staked Ethereum. The token’s mechanics involve simultaneously longing and shorting other assets, maintaining its dollar peg through the net effect.

According to data from DefiLlama, users have deposited nearly $6 billion into USDe, showcasing the token’s popularity. Ethena Labs has also launched USDtb, a stablecoin backed by tokenized money market BUIDL, which invests in U.S. government-issued debt such as Treasury Bills.

Benefits of sUSDe Integration with World Liberty Financial

If the proposal is approved, integrating sUSDe into World Liberty Financial would provide several benefits for users, including:

  • Accruing sUSDe rewards to enhance native WLFI gains
  • Boosting stablecoin liquidity and user engagement
  • Capturing a broader range of users seeking higher on-chain reward rates

According to Ethena Labs, introducing sUSDe to WLFI via Aave’s Core instance would diversify the user base and solidify World Liberty Financial’s position as a premier destination for stablecoin lending and borrowing.

Proposal Status and Next Steps

The proposal to connect sUSDe and WLFI is subject to the Aave protocol activating its lending contracts on World Liberty Financial. Aave governance members voted in favor of deploying Aave v3 on WLFI via a vote concluded on December 13.

As the proposal moves forward, Ethena Labs’ partnership with BlackRock and Securitize to launch USDtb demonstrates the company’s commitment to innovation in the stablecoin space.

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