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MEXC Ventures Invests $36M in Ethena and USDe as Stablecoin Demand Continues to Surge
The investment aims to boost stablecoin adoption and crypto accessibility.
What to know:
- MEXC Ventures is investing $36 million in Ethena and its USDe stablecoin to boost the adoption of synthetic dollars in decentralized finance (DeFi).
- Unlike traditional stablecoins, USDe is a synthetic stablecoin that is not backed 1:1 by fiat assets but maintains its value by collateralizing other stablecoins and taking futures positions.
- MEXC's investment comes amid increasing competition in the stablecoin market, with Ethena is seen as a key player in developing diverse stablecoins that will drive broader adoption of cryptocurrency.
MEXC Ventures, the investment arm of crypto exchange MEXC, is investing a total of $36 million into Ethena and its USDe stablecoin, according to a press release.
The firm is making a strategic investment of $16 million in Ethena and bought $20 million in USDe stablecoin to expand the adoption of synthetic dollars in decentralized finance (DeFi) and offer an alternative to fiat-backed stablecoins, the statement said.
STORY CONTINUES BELOW
The move comes after Ethena, the developer of USDe, raised $100 million last year, which was backed by Franklin Templeton and Fidelity Investments-affiliated F-Prime Capital, among others.
Known as a synthetic stablecoin, USDe is unlike traditional stablecoins like USDT and USDC in that it is not backed 1:1 by fiat assets. Instead, it maintains its peg by collateralizing stablecoins and taking futures positions with large open interest.
USDe's market cap has risen to nearly $6 billion, while more traditional stablecoins currently have market caps above $50 billion, according to CoinMarketCap data. The total market cap for stablecoins is currently above $200 billion.
MEXC’s backing comes as competition in the stablecoin market intensifies, with projects seeking innovative models to ensure stability and accessibility.
"As demand for investment in bitcoin and other digital assets continues to rise, stablecoins are set to attract even greater investment," said Tracy Jin, COO of MEXC.
"MEXC sees Ethena as a key player in the development of diverse stablecoins that will drive the crypto industry forward, supporting broader adoption and providing users with more stable and efficient financial solutions."
Read more: Stablecoin Market Cap Tops $200B as U.S. Sees Industry Helping Maintain Dollar Dominance
Aoyon Ashraf
Aoyon Ashraf is CoinDesk's managing editor for Breaking News. He spent almost a decade at Bloomberg covering equities, commodities and tech. Prior to that, he spent several years on the sellside, financing small-cap companies. Aoyon graduated from University of Toronto with a degree in mining engineering. He holds ETH and BTC, as well as ALGO, ADA, SOL, OP and some other altcoins which are below CoinDesk's disclosure threshold of $1,000.
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