cryptobanking

Something just worries me about Ethena. The USDe is a long ETH, short ETH-USD perp synthetic, and that screams bad to me. There's plenty of times when the perp funding rates are negative or even the spread becomes massive between spot and perp markets. I'm not sure I would call this a "dollar" at all.

As a structured product, I think it makes sense for simplifying access to a complex trade.

Building Mountain Protocol.

mountainprotocol.com

My concerns:
1) if Ethena scales (which it will) can negative funding rates lead to redemptions which put sale pressure on eth, leading to even more negative funding rates. Would this create a large downwards candle that can create losses? Idk, but seems like all models do not account for Ethena itself.

2) Compliance: no blacklist, unregistered fund. This will be solved, but may not be permissionless for long.

Overall I am excited tho, Ethena is building something that is actually useful!