1. Details of the Ethereal Exchange Proposal
2. Skepticism and Community Concerns
3. Stabilization of USDe Supply

Ethena Governance received a new proposal to build Ethereal Exchange, a perpetual DEX based on USDe. Ethena Labs approved the proposal, and voting is open until September 30.

Details of the Ethereal Exchange Proposal

The new proposal submitted to Ethena Governance suggests the creation of Ethereal Exchange, a platform for spot and perpetual futures trading. The market will leverage Ethena’s network and its liquidity and technical support features. Ethereal Exchange has also requested to be linked to Ethena Labs’ reserve management, liquidity, and hedging mechanisms. The new DEX will act as a settlement layer and increase the use cases for USDe. All current ENA token holders will be eligible to receive a 15% share of the newly created token, if issued.

Skepticism and Community Concerns

The Ethena Labs community has expressed some skepticism about the project, asking for a fully named team and their histories before committing. Some members may vote against it, preferring Ethereal DEX to launch as an independent entity first. The proposal was written by a new account, 'Fells0x,' with a 'new user' trust level. Ethereal DEX has limited social media presence, making this proposal its first connection to Ethena Labs. Ethereal aims to integrate into Ethena’s hedging system, which would allow it more control over USDe liquidity and timely redemptions. However, the skepticism remains due to the lack of information about the team and the bold proposal.

Stabilization of USDe Supply

One of the challenges for Ethena has been to balance USDe issuance and retain enough staked USDe to maintain its dollar peg. The supply of USDe has decreased and stabilized at approximately 2.6 billion tokens, down from a peak of 3.6 billion. At the current ETH price range, USDe has achieved stability. The ratio of staked USDe to freely traded tokens also shifted since the ETH price correction in August. USDe now makes up 58% of all Ethena assets, while sUSDe dipped slightly to 42%. This staked version grew from a share of 13% in May, reflecting increased trust. Ethena currently locks in $2.543 billion in its vaults, close to the total circulating amount of USDe. The asset is collateralized with BTC and supported by Ethena’s insurance fund.

The proposal to create Ethereal Exchange has sparked varied opinions within the Ethena Labs community. While the possibility of new financial instruments and increased usage of USDe exists, the skepticism from part of the community requires full transparency and additional information about the project team.