- Ethena Labs integrates BNB, with XRP and HYPE under consideration, in its new Eligible Asset Framework for the USDe.
- The organization included the mentioned crypto assets as they all surpassed the framework’s $1 billion open interest benchmark to ensure stability for its synthetic stablecoin.
Ethena Labs, the issuer of Ethena (ENA), has recently unveiled a new framework involving a group of cryptocurrency assets. Following its approval of Binance Coin (BNB) as backing for its USDe synthetic stablecoin, the company announced the inclusion of XRP and Hyperliquid (HYPE) in its revamped infrastructure.
Ethena Onboarding BNB, XRP, and Hype Into the USDe Ecosystem
According to the company’s announcement on Friday, the Ethena Risk Committee, a body responsible for identifying, evaluating, and managing risks within the Ethena ecosystem, has adopted a new approach to expanding its backing assets under its newly-established “Eligible Asset Framework.” The move particularly concerns the perpetual futures aspect of its collateral backing for the USDe.
As a recap, the USDe is a crypto-backed synthetic dollar stablecoin. It employs a delta hedging strategy to reduce directional risks in the US dollar peg of the digital asset, instead of directly tying it to traditional fiat physical reserves.
Initially, Ethena only utilized Bitcoin (BTC), Ethereum (ETH), and Solana (SOL) spot assets using perpetual and deliverable futures contracts to maintain the stability of its synthetic stablecoin. Before the weekend, it revealed that it has embraced BNB in the new model.
The foundation plans to include more crypto assets in the framework, adding XRP and HYPE as candidates for the new system.
Reason for the Inclusion
Ethena Labs explained that for certain crypto assets to be included in its new framework, they must have a minimum threshold of $1 billion in aggregate open interest (OI). The rationale behind the requirement is to ensure that they have enough market depth for hedging. A high OI enables the Ethena team to enter and exit trading positions without encountering significant slippage.
Additionally, the digital asset must have an average of $100 million in 24-hour spot volume within a week, while its perpetual volume must be no less than $100 million. Meanwhile, it must have a 1% market depth in spot and perpetuals of over $500K and $10 million, respectively. Moreover, it should be able to clear at least $300 million in 180-day open interest.
XRP and HYPE have been surpassing the requirements of Ethena by a wide margin, making them the top candidates for its Eligible Asset Framework. As of Saturday evening, XRP has recorded more than $2.9 billion in 24-hour OI for perpetual and futures contracts. On the other hand, HYPE has achieved $1.7 billion in 24-hour OI contracts within the same period.
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