Ethena to Launch iUSDe Targeting TradFi

Ethena is set to launch a new crypto-based product targeting traditional finance (TradFi) institutions, called iUSDe.

According to the company’s roadmap published on January 3, iUSDe will roll out in February and it’s built on the foundations of Ethena’s synthetic dollar, USDe. 

The iUSDe introduces a “simple wrapper contract” designed to enforce transfer restrictions at the token level.

iUSDe is identical to sUSDe with the addition of a simple wrapper contract that adds a handful of transfer restrictions at the token level so that it can be held and used by traditional financial entities.

The roadmap outlines Ethena’s primary goal for the first quarter of 2025, which is to partner with TradFi distribution networks and make iUSDe accessible to their clients, announcing their distribution partners by the end of January. 

In general, the product aims to attract asset managers, private credit funds, exchange-traded products, private investment trusts, and prime brokers.

By providing the connective tissue to legacy finance which can source dollar borrow at SOFR+100-200bps spread, capital will be free to flow into Ethena at unprecedented scale until sUSDe protocol returns converge to a tight spread to risk-free rates.

Ethena’s Plans for 2025

Ethena’s roadmap suggests the potential demand for yield-generating dollar products could surpass the entire cryptocurrency market, given that USDe offers a 10% annual percentage yield (APY) and has attracted over 368,000 investors. The synthetic dollar generates yield through staking returns and shorting Ether (ETH) perpetual futures contracts, as explained by Ethena Labs founder Guy Young.

The platform is one of the largest DeFi protocols by total value locked (TVL), currently surpassing $5.5B. USDe is also the third-largest US dollar-based stablecoin, following Circle’s USDC and Tether’s USDT.