Add USDe (Ethena USD) Token to Moonwell Markets on Base and Optimism

Proposals
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I’m excited to propose adding USDe (Ethena USD), the stablecoin from Ethena Protocol, to Moonwell’s core lending markets on Base and Optimism. This move will enhance market utility, encourage ecosystem growth, and provide users with a decentralized, stable asset that aligns with our protocol’s mission.

General Information

Token: USDe (Ethena USD)

Description: USDe is the stablecoin of the Ethena Protocol, designed to maintain a soft peg to the U.S. dollar. It integrates seamlessly within the DeFi ecosystem, combining stability, flexibility, and decentralization. Key features include:

  • Simple USDe Conversions: The USDe/USD converter allows easy and unrestricted 1:1 conversions between USD and USDe, ensuring fluid liquidity movement.
  • Participation in Ethena Savings Rate: USDe holders can earn rewards through the Ethena Savings Rate, offering a decentralized, non-custodial savings option without losing control of their funds.

Benefits to the Moonwell Community

  • Enhanced Stablecoin Liquidity: Adding USDe will expand our stablecoin offerings, creating more lending and borrowing opportunities. This addition will make Moonwell the largest source of multiple stablecoins in the market.
  • Increased Protocol Engagement: By integrating USDe, we can attract users from the Ethena Protocol ecosystem, including those looking to leverage the Ethena Savings Rate for stable returns.
  • Decentralization Alignment: As a new version of traditional stablecoins, USDe represents a permissionless, non-custodial alternative that aligns with decentralized finance principles.
  • Reduced Systemic Risk: Backed by surplus collateral and supporting secure 1:1 conversions, USDe offers a stable, reliable asset that reduces risks associated with over-leveraged or under-collateralized stablecoins.
  • Effortless Integration: Adding USDe to Moonwell doesn’t require new code development. All necessary functionalities and mechanisms are already in place within our current infrastructure, making the addition of USDe smooth and efficient.

Resources and Socials

Market Risk Assessment

Market Metrics:

  • Market Cap: $5.8B (across all networks)
  • Vol/Mkt Cap (24h): 1.1%
  • Maximum Supply: Unlimited USDe
  • 24 Hour Trading Volume: $64M

Liquidity on Decentralized Exchanges:

  • Curve (Ethereum): $20,000,000

Decentralization

Top 10 Holders:

Smart Contract Risks

Codebase and Onchain Activity:

  • Total Transactions: 36K on Base , 58K on Optimism
  • Age of Token in Days: 229 days on Base and 323 days on Optimism
  • Security Posture: Audits | Ethena
    Upgradability:
  • Is it Upgradeable: No.

summary of the Ethena Protocol documentation:

Key Features

  • USDe (Synthetic Dollar): USDe maintains a soft peg to the U.S. dollar through delta-hedging mechanisms. It’s designed to be censorship-resistant and fully-backed by crypto assets.
  • sUSDe (Internet Bond): sUSDe is a reward-accruing asset derived from staked asset returns and the funding/basis spread available in perpetual and futures markets.
  • Delta Hedging: USDe’s peg stability is achieved by executing automated delta-neutral hedges with respect to the underlying backing assets.
  • Permissionless Minting: Users can acquire USDe in external liquidity pools, and approved parties can mint and redeem USDe on-demand.

Benefits

  • Decentralization: USDe is non-custodial and permissionless, aligning with decentralized finance principles.
  • Stability: The delta-hedging mechanism helps maintain a relatively stable value.
  • Revenue Generation: Ethena Protocol generates revenue from staked ETH assets and the funding/basis spread from delta-hedging derivatives positions.

Risks

  • Market Conditions: The stability of USDe can be affected by market conditions and the performance of the backing assets.
  • Counterparty Risk: While minimized, there is still some counterparty risk associated with derivatives exchanges.

Oracle Assessment

Oracle Price Feed Addresses:

  • USDe-USD, Base Feed Address: 0x790181e93e9F4Eedb5b864860C12e4d2CffFe73B
  • USDe-USD, Optimism Feed Address: 0xEEDF0B095B5dfe75F3881Cb26c19DA209A27463a
  • Relevant Documentation: Base Optimism
  • Tier: Low Market Risk

Proposal Author Information

Name: AsgardAdmin
Github: AzgardMultiSig (AzgardAdmin) · GitHub
Delegate Address: 0xC4c1e942c6B97EE736d15E6edE71dBc323200c3d
Relationship with Token: I have no personal or professional relationship with the USDe token.

Conclusion

Adding USDe as a core lending market will boost stablecoin utility and drive liquidity growth on Moonwell. By supporting USDe, we can offer users new financial opportunities while promoting stability and innovation within our protocol.

I’m opening this proposal to the community for review, discussion, and feedback to ensure its success and alignment with our vision for a secure and decentralized onchain financial future.

Invitation to Gauntlet

We invite @Gauntlet to review USDe as collateral and provide a risk recommendation to ensure a thorough assessment and alignment with our protocol’s risk management framework.

2 Likes
2

I would be in favor of a review by Gauntlet

1 Like