Ethena Labs, the developer behind the synthetic dollar project, has received approval for the creation of a USDeFRAX liquidity pool in collaboration with Frax Finance. This move aims to enhance the yield diversification of the FRAX stablecoin.
The approval of the Singularity Roadmap proposal from Ethena Labs has paved the way for the establishment of a USDeFRAX pool on the defi stablecoin exchange Curve, with a maximum limit of $250 million.
Despite concerns raised by Fantom developer Andre Cronje about the risks associated with the USDe token’s peg system, which relies on collateralized positions to maintain parity with the U.S. dollar, Ethena Labs and Frax Finance remain committed to delivering robust on-chain dollar liquidity.
It’s worth noting that Ethena Labs’ USDe stablecoin has recently surpassed a $2 billion market capitalization since its launch in February, despite some controversies surrounding its design and initial security exploit. However, the protocol swiftly addressed the security issue and has continued to expand the integration of USDe across various platforms.
Furthermore, Ethena Labs has distributed its governance token ENA through an airdrop, providing early supporters and participants with 750 million free tokens.