Source: "Bill It Up"
Content organized by: Peter_Techub News
In the cryptocurrency space, Ethena Labs' USDE has risen at an astonishing pace, becoming one of the fastest-growing stablecoins in history. In Episode 34 of "Bill It Up," we invited Guy Young, the founder and CEO of Ethena Labs, to share his story of transitioning from traditional finance to the crypto space, explaining how USDE surpassed a market cap of $13 billion in just 18 months, and discussing the future role of stablecoins in global finance. From the lessons learned from the Luna and FTX debacles to raising $360 million, Guy reveals the core experiences behind building a billion-dollar protocol. This article will take you deep into the highlights of this fascinating conversation, exploring the innovations, challenges, and future of USDE.
From Traditional Finance to Crypto Pioneer: Guy Young's Entrepreneurial Journey
Guy Young's career began in traditional finance, working in investment banking and private equity at institutions like Cerberus Capital. However, he has always believed that cryptocurrency has the potential to reshape the global financial system. In early 2020, Guy was introduced to decentralized finance (DeFi) and was attracted by its efficiency and low costs. He discovered that DeFi applications could manage billions of dollars in capital flows with just a few dozen people, rather than thousands, and this "internet-speed finance" opened up unprecedented investment opportunities for him.
Three days after the collapse of Luna in 2022, Guy resolutely resigned from his job at a hedge fund and founded Ethena Labs. He candidly stated that his decision to enter the crypto space during a bear market was not blind but based on a profound belief in the industry. He aimed to build truly valuable products during market lows rather than chase the bubbles of bull markets. The USDE launched by Ethena Labs, known as a "synthetic dollar," achieves censorship resistance, scalability, and high stability through Ethereum staking yields and perpetual contracts, aiming to become the future of "internet-native currency."
USDE's Innovation: The Unique Design of Synthetic Dollars
Guy defines USDE as a "synthetic dollar," which differs from traditional stablecoins in that its design is based on a "delta-neutral strategy." By going long on assets like Bitcoin or Ethereum in the spot market while shorting an equivalent nominal value of assets in the derivatives market, USDE achieves price stability and generates yields. This innovative mechanism allowed USDE to grow from zero to nearly $13 billion in just 15 months, making it the fastest-growing dollar asset in the crypto space.
Guy emphasizes that the core advantage of USDE lies in its focused use case: trading collateral and yield generation, rather than attempting to become a "universal stablecoin." He believes that startups should not try to compete with giants like Visa and PayPal in the payment space but should focus on their own strengths. The goal of USDE is to replace dollar assets (like USDC) in centralized exchanges, providing traders with yield-bearing collateral. For example, within a year of USDE's launch on Bybit, its balance exceeded twice that of USDC, accounting for 13% of Bybit's dollar assets. Additionally, USDE serves as a savings tool, attracting users with structurally high yields, offering a significant advantage over non-yielding USDT.
Challenges and Breakthroughs: The Story Behind Building a $13 Billion Protocol
Ethena Labs' success has not been without challenges. Guy admits that the biggest challenge has been establishing trust with centralized exchanges. Given that USDE involves billions of dollars in positions, exchanges have been cautious about its scale and risk management capabilities. Ethena addressed this issue by introducing off-exchange custody, storing all assets with qualified custodians like Coinbase Custody and Fireblocks, thereby reducing counterparty risk. This design not only enhanced security but also made it easier for institutional investors to accept USDE.
Another key breakthrough was deep collaboration with exchanges. Ethena became the first project to gain support from nearly all major offshore centralized exchanges, including Bybit and Binance. This collaboration involved not only technical integration (such as supporting USDE trading pairs on Bybit) but also trust-building to ensure exchanges recognized Ethena's ability to manage large-scale assets. Guy stated that the key to success lies in "focusing on what we do best," dominating the trading and yield generation space through differentiated strategies.
Global Impact: The User Profile Behind $13 Billion
USDE's user base spans the globe, from institutional investors in New York to family offices in Asia and retail users in Brazil, presenting a diverse investment landscape. Surprisingly, South Korean users contributed 40% of the traffic to Ethena's official website, indicating a strong demand for stablecoins in the Asian market. Brazil and China follow closely, reflecting the offshore market's thirst for dollar assets. Guy pointed out that USDE's success stems from its ability to meet the demand for dollar liquidity in emerging markets, rather than attempting to replace traditional payment tools like Visa or Mastercard.
The Future of Stablecoins: A Vision Towards $50 Billion
Looking ahead, Guy believes the stablecoin market will grow from its current $260 billion to $2-4 trillion, with USDE expected to reach a supply of $30-50 billion in the next three years. He attributes this vision to three key areas: DeFi, centralized finance (CeFi), and traditional finance (TradFi). Currently, USDE has integrated with 90% of the major protocols in DeFi, such as MakerDAO and Pendle; in the CeFi space, Ethena has covered 50-60% of major exchanges and will further expand to Binance and OKX; in TradFi, Ethena has attracted institutional capital through a $360 million Digital Asset Trust (DAT), 100% of which is used to repurchase ENA tokens in the open market, demonstrating a commitment to token holders.
Guy also mentioned that partnerships with derivatives exchanges (like Hyperliquid) will bring new growth points. For instance, if 25-50% of Hyperliquid's USDC flow shifts to USDE, Ethena could gain an additional $120-250 million in annual cash flow. This symbiotic relationship with exchanges not only enhances USDE's liquidity but also provides exchanges with hedging flow.
Advice for the New Generation: Embrace Long-Termism and Leverage Social Media
For young people looking to enter the crypto and fintech space, Guy offered two pieces of advice. First, leverage social media (like Twitter) to build connections. He noted that the openness of the crypto space allows anyone with unique insights to reach industry leaders, and many of Ethena's employees were recruited through cold messages on Twitter. Second, embrace long-termism and avoid short-term temptations. Guy emphasized that while there are many opportunities for quick wealth in the crypto industry, maintaining integrity and reputation is the cornerstone of long-term success. He advises newcomers to persist in the industry for 5-10 years, accumulating trust and experience for substantial rewards.
Managing the Pressure of $13 Billion: How to Stay Efficient
Facing the pressure of managing $13 billion in assets, Guy admitted that he initially struggled with sleepless nights, especially during the market lows following the collapses of Luna and FTX. However, as the system stabilized, he has since been able to sleep soundly. His daily routine includes 45 minutes of exercise in the morning, followed by 15 hours of high-intensity work. Guy joked that he has gained 10 kilograms since starting his entrepreneurial journey, but maintaining his physical and mental state is key to sustaining high performance.
Conclusion: The Magnificent Journey of USDE and Ethena
Guy Young and Ethena Labs have redefined the concept of stablecoins through USDE, showcasing the power of technology and belief in the transition from traditional finance to the crypto space. From surpassing $13 billion in just 18 months to aiming for a grand target of $50 billion, USDE is not just a financial product but a vision for the future of internet-native currency. Guy's experience teaches us that focusing on niche markets, building trust, and embracing long-termism are the core elements of success in crypto entrepreneurship.
(Data source: Interview from Episode 34 of "Bill It Up," Ethena Labs official website, and public market data. For investment advice, please consult a professional advisor.)
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