Decentralized finance protocol Ethena, identified for its synthetic buck USDe, might well maybe per chance onboard Solana’s native token SOL as a backing asset for the stablecoin.

The neighborhood is now brooding about an Oct. 10 proposal from Ethena Labs that recommends an allocation of USDe’s backing to SOL. The setup would use the same mechanics as the hedging mechanism in space with BTC and ETH perpetual futures.

In step with the proposal, the allocation might well maybe per chance be scaled in slowly on condition that SOL perpetual futures personal a shorter history of trading, less liquidity, and comparatively decrease funding rate recordsdata.

Ethena first published the doubtless inclusion of SOL as a backing asset for USDe in August, when the protocol rolled out USDe on the Solana community. Now that the proposal has officially been do forth to the governance discussion board, individuals of the Threat Committee — with the exception of Ethena Labs Examine — must vote unanimously in prefer of it to be popular.

The Threat Committee will personal seven days after this proposal’s put up date to deliberate and procedure at a choice, which blueprint a verdict on its approval is seemingly sooner than the discontinuance of the week.

The proposal furthermore recommends brooding about  Binance Liquid Staked SOL (BNSOL) and Bybit Liquid Staked SOL (bbSOL) to be added as a USDe backing asset. The tokens might well maybe per chance be added within the same proportion as the overall SOL allocation as ETH Liquid Staking Tokens (LSTs) to the total ETH allocation internal USDe’s overall backing.

“This has the doubtless to derive Ethena one of the most largest perp traders of SOL on the market and pressure elevated sUSDe APY,” said Seraphim Czecker, head of utter at Ethena Labs.

In step with Yash Agarwal, core contributor to the Superteam collective of Solana builders and creators, adding SOL as a backing asset to USDe might well maybe per chance “be extensive for the moneyness of SOL.”

Agarwal highlighted SOL’s $2 billion in open hobby, which would derive $200 million as collateral easy to scale into. The proposal’s authors estimate that this would per chance maybe per chance be the preliminary aim, with positions of between $100 million and $200 million representing 5-10% of SOL’s open hobby.

Ethena within the mean time represents 3% of BTC open hobby and 9% of ETH open hobby.