Ethena Secures 5% of Ethereum Perpetual Futures Open Interest, Founder Downplays Concerns

Recent data reveals that Ethena, a recently launched protocol, holds 5% of all open interest in Ethereum perpetual futures. Analysts have noted that rapid growth comes with increased risks. However, the founder of Ethena Labs, known as Leptokurtic, has downplayed concerns, stating that self-correcting market mechanisms can mitigate risks. Leptokurtic explains that if the yield on USDe (Ethena's stablecoin) significantly drops, the self-correcting mechanism comes into play. In such a scenario, market participants would choose to no longer collateralize USDe. He further explains that if they do so, the funding rate would return to a new equilibrium.