Ethena partners with FalconX for institutional adoption of USDe

Ethena Labs is teaming up with digital asset prime brokerage FalconX to enhance institutional adoption of Ethena’s synthetic dollar, USDe.

FalconX announced on Sept. 4 that it had added spot trading, derivatives and custody support for USDe ( USDe ), the U.S. dollar denominated stablecoin by Ethena ( ENA ). 

The integration means institutional clients can now tap into FalconX for over-the-counter liquidity for USDe, a stablecoin that currently ranks as the third-largest by supply. USDe accounts for about $12.5 billion of the stablecoin market cap of $297 billion, with Tether ( USDT ) and USDC ( USDC ) at $168 billion and $72.5 billion the top two respectively.

In addition to OTC liquidity access, eligible institutional clients will be able to use USDe on FalconX as collateral. The feature will apply in certain credit and derivatives transactions, FalconX noted in a blog post.

“We are excited to be working with one of the leading institutional liquidity providers in the space to broaden access to USDe for their client base. FalconX has a long history of providing innovative solutions to maximise capital efficiency for their clients and we are excited to support their platform with a unique product offering,” Guy Young, founder at Ethena Labs, said in a statement. 

Unlocking portable yield

FalconX hopes to unlock greater capital efficiency with this integration, expanding institutional access to USDe’s delta-neutral basis strategy. With the U.S. dollar-denominated stablecoin, users can tap into portable yield across decentralized finance and traditional finance ecosystems. 

The platform will also extend market liquidity for both the USDe stablecoin and the native Ethena token, ENA, across selected venues, including bilateral trading channels and centralized and decentralized exchanges. In crypto, users can generate yield via staking, lending, and other strategies available to DeFi participants.

This move has the potential to bump up Ethena’s DeFi ecosystem.

Currently, the protocol boasts over $14 billion in total value locked. Key integrations for USDe that Ethena Labs has struck include a collaboration with the TON Foundation. Unveiled in May, the partnership aimed at increasing the stablecoin’s adoption across Telegram.