Ethena Labs Expands Its “Synthetic Dollar” USDe to the Solana Blockchain and Plans to Add the SOL Token as a Backing Asset

USDe's integration with Solana was achieved through LayerZero's omnichannel fungible token (OFT).

Stablecoin issuer Ethena Labs has expanded its “synthetic dollar” USDe to the Solana blockchain, with plans to add the SOL token as a backing asset for the stablecoin.

The USDe stablecoin was integrated with Solana on August 7 through LayerZero’s omnichannel fungible token (OFT) technology. According to Ethena Labs, the move aims to tap into Solana's龐大 stablecoin market presence.

Solana houses over $3.5 billion in stablecoin supply, but Ethena Labs claims that more than 90% of this supply doesn’t offer any rewards. The company noted that USDe aims to fill this gap and attract new users by allowing them to transact on Solana while earning rewards through its staked version, known as sUSDe.

Ethena Labs also plans to propose SOL and a liquid staking version — jitoSOL — as collateral assets for USDe through a governance decision next week. This step could unlock an additional $2 billion to $3 billion in open interest across major exchanges, further boosting USDe’s scalability.

Furthermore, USDe holders on Solana can earn Ethena sats by staking USDe on Kamino, Orca, and Drift Solana protocols. These sats can be used to reduce trading fees or to purchase nonfungible tokens (NFT) on Solanart.

According to market analysts, these new developments could bolster USDe's adoption among retail crypto users. Due to its fast transaction speeds and low costs, the Solana blockchain has become a major network for stablecoins, attracting the attention of payment giants like PayPal.

Following the announcement, USDe quickly gained ground on Solana, with Solscan data showing its supply on the blockchain at $523,936 at press time. According to CryptoSlate data, USDe is the fourth-largest stablecoin in the crypto market, with a circulating supply of $3.1 billion.

Related:Solana’s July DEX volume exceeds Ethereum amid wash trading concerns

Meanwhile, Ethena Labs' expansion into Solana comes during the week that USDe experienced its largest redemption, with nearly $100 million being pulled from the stablecoin on August 5 amid a broader crypto market sell-off.

Conor Ryder, head of research at Ethena Labs, confirmed that USDe handled these redemptions effectively, maintaining its peg within 30 basis points despite the market fluctuations.

Unlike traditional stablecoins that are backed by direct fiat or tangible assets, USDe does not hold fiat or direct on-chain collateral. Instead, it uses derivative hedging with collateral positions in ETH and Bitcoin and an arbitrage system for minting and redeeming to maintain its peg to the U.S. dollar.

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