Published: Oct. 9, 2023, 10 a.m.
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Guy Young, the founder and CEO of Ethena, joins the show to talk crypto-backed stablecoins.\\xa0
- How Ethena began with an Arthur Hayes blog post
- The origins of synthetic stablecoins on Bitmex
- The difference between Hayes\\u2019 Nakadollar and the Ethena design
- Why synthetic stablecoins have failed in the past and how Ethena addresses this
- How staked ETH as the underlying collateral opens up a new design space
- How Ethena mitigates their exposure to exchanges with off-exchange custody
- Guy\\u2019s backstory and entrance into crypto
- Why the circumstances are favorable for the success of a synthetic stable today
- Why the short leg of the Ethena position has to rely on CeFi for now
- Where the yield from ETH positive funding ultimately comes from
- Limits to scale on Ethena on the short leg of the trade and ETH staking
- Guy\\u2019s explanation for where the yield from being long ETH comes from
- Correlation dynamics between the ETH yield and the funding rate
- Why it\\u2019s important that crypto yields are somewhat negatively correlated with tradfi yields
- What protects the system when funding flips negative?
- How the system can react to constraints in ETH funding and ETH staking
- The possibility of adding Bitcoin as a collateral type
- Why Ethena distinguished the stablecoin and the yield-bearing component
- Rebasing versus accruing yield tokens
- How they think about different stETH derivatives
- Ethena versus stETH-backed overcollat stablecoins
- Why the supply of stablecoins is shrinking
- Will major stablecoin issuers become interest bearing?
- Ethena\\u2019s regulatory strategy
- The BUSD security analysis from the SEC and how interest bearing affects that
- Why end users deserve yield in exchange for taking on the counterparty risk of holding a stable
- Why Guy is excited by Paypal USD
- Guy\\u2019s prediction for stablecoin interest-bearing market cap
Further reading:
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