The Ethena community is preparing to vote on a pivotal proposal to incorporate Ethereal, a decentralized exchange built on the USDe framework, into Ethena’s reserve management system. This initiative aims to enhance the “utility and demand” for USDe, a synthetic stablecoin created by Ethena Labs.
Proposed by community member “Fells0x” on September 30, the plan seeks approval for Ethereal to oversee spot and perpetual futures positions that support USDe. Should the proposal receive backing, Ethena token holders will be entitled to 15% of any future governance tokens generated by Ethereal.
Ethereal V1 is slated for a testnet launch in the fourth quarter and aspires to deliver performance comparable to centralized exchanges while ensuring “complete self-custody,” according to the proposal. Its architecture is designed to handle an impressive one million operations per second with latency below 20 milliseconds.
“The launch of Ethereal will serve as a blueprint for other applications utilizing USDe within the Ethena Network, propelling Ethena’s evolution from an asset issuer to a hub for financial innovation,” stated Fells0x.
The proposal also hints at potential synergies in the future, such as decentralized lending and borrowing platforms built on the USDe framework.
In addition, the proposal comes on the heels of Ethena’s announcement of UStb, a stablecoin backed by BlackRock, which aims to address community apprehensions regarding USDe. Supported by the BlackRock USD Institutional Digital Liquidity Fund and private lender Securitize, UStb was introduced as a protective measure against systemic risks associated with negative funding rate scenarios.
Notable figures like Andre Cronje have previously voiced concerns about USDe, comparing it to the now-defunct TerraUSD. However, Ethena asserts that no significant risks have emerged during USDe’s six-month operational period.
Pending community approval, Fells0x has requested technical assistance from the Ethena Foundation and Risk Committee to facilitate a seamless integration of Ethereal into Ethena’s hedging strategies. The vote is anticipated in the coming months, although a specific date has yet to be determined.
