The web3 venture firm Dragonfly Capital led a $6 million seed funding round for Ethena, a startup building Ethereum-backed stablecoins.
Ethena's other funders include Deribit, Bybit, OKX, Gemini, Huobi and BitMEX founder Arthur Hayes, according to Axios.
Ethena maintains the peg for its USDe stablecoin by using collateral from users to short ether using perpetual swaps and hedge price exposure. The company has also created a savings bond which uses staked ETH and swap margins to generate yield.
Ethena's next move is to finish its testnet phase sometime in the third quarter, launching its USDe stablecoin and savings bond after completion.
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