Unlike asset-backed stablecoins like tether (USDT) and USDC, whose value is secured against dollars or dollar-equivalents such as U.S. government debt, USDe calls itself a synthetic stablecoin with its $1 value maintained through a financial technique known as the cash-and-carry trade. The trade, which involves buying an asset and simultaneously shorting a derivative of the asset to collect the funding rate, or the difference between the two prices, is well known in traditional finance and doesn’t carry directional, or delta, risk.

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• Source: https://www.coindesk.com/business/2024/04/11/ethena-labs-divides-opinion-as-high-yield-stirs-memories-of-terra/?utm_medium=referral&utm_source=rss&utm_campaign=headlines