The founder of Athena Labs made clear the stability of the USD amid high yield worries

Initial concerns surrounding Athena Labs' USDe stablecoin product are a natural sign of a mature industry recovering from the collapse of the Terra-LUNA ecosystem, Athena Labs founder Guy Young told Cointelegraph in an exclusive interview on February 22.

“To immediately refer to what we saw with Terra-Luna is a knee-jerk reaction to people's self-fulfilling … It's right that people are reacting the way they are because we're responding with skepticism and trying to fix it.” [protocols] If they are too big, they are weak at first rather than allowing them to grow.

The Ethena USD stablecoin caused widespread concern in the crypto community after its launch on the public network on February 19. USDe, an Ethereum-based synthetic dollar, currently offers an annual percentage yield (APY) of 27.6%, according to the Etena Labs homepage.

The 27% yield is much higher than the 20% yield provided by the Encore protocol in Terra UST before the algorithmic stable coin issuer collapses in May 2022, posing a threat to the economic sustainability of the protocol. Days.

Unlike USDA at Etena Labs Young, the production of the anchor protocol was completely artificial, with no sustainable means of production. he said:

“The biggest part of what we're trying to get through is that the Encore product is fully developed. There were only venture capital firms that would put money into the anchor and pay for the product from wherever it came from.

In contrast, Athena Labs' USD product is officially certified. Yang told Cointelegraph that artificial dollar production is generated by stock returns and shorting of Ether's perpetual futures contracts.

According to Jay Sik Choi, an analyst at Greythorn Capital, Ancore's artificially inflated yield was unsustainable, unlike the volatile yield introduced by USDe:

“The real yield on Ancore paid ~5.81% and 19.45%, which we saw as a risk factor because the yield backing the product is less than what it pays… There is no such thing as “risk-free”. Because the product is clearly defined and we know where it's coming from, the returns advertised in Ancore (Perpetual Futures + stETH).

Athena Labs' USDe double-digit yield isn't the only promising product. According to the Pendle home page, some share pools on Pendle Finance, such as the ezETH pool, offer a fixed annual percentage yield (APY) of 41% for the Ether held.

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