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Is ENA coin a good investment in Q2 2024?

Updated: May 22

Author: Aurel Bakeyala Nkele

Publication date: 16.05.2024


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The cryptocurrency world has long needed a decentralized base currency, independent of traditional banking infrastructure such as Ethena (ENA). At the start of the second quarter of the cryptocurrency market, ENA and its synthetic dollar USDe are attracting the attention of all those looking for financial stability. From day one, the product was a success, attracting hundreds of millions of dollars and tens of thousands of users. Now the question is whether it is worth investing in it.


About ENA


It is a synthetic dollar protocol developed on the Ethereum blockchain, collateralized by crypto assets and Futures short positions. This unique approach helps provide a stable, scalable and censorship-resistant version of crypto-native currency.


With a total value locked (TVL) of $1.9 billion and an impressive 35.4% USDe yield, it has attracted over 117.83 thousand users and quickly become one of the leading protocols in DeFi.



How does it work?


ENA issues a decentralized stablecoin called USDe, likened to an “Internet bond” for onchain markets. It uses a mechanism called delta hedging with Ethereum collateral, guaranteeing the stability and free use of USDe in DeFi. Users can create USDe by depositing staked Ethereum (stETH) and redeem them, adjusting the supply to maintain a tight peg with USD.


Here are the different technical elements presenting how USDe works:


 

●     Delta Hedging Mechanism

 

●     Issuance and redemption process

 

●     Yield Mechanisms

 

●     Risk mitigation and transparency



Risks and forecasts


Like any cryptocurrency, he presents risks, including price volatility, government regulation and the security of certain trading platforms. Since the protocol was launched recently, it has not yet been tested and some of its mechanisms could have drawbacks. Ethena is also exposed to counterparty risk from centralized derivatives exchanges where it holds perpetual short positions.


ENA is trading today for $0.8759. The media Coin Edition also looked at the Fibonacci trading strategy which showed that ENA could reach $1.57 in the short term. With the state of these indicators, the price prediction for ENA could be higher in 2024. If the rest of the year remains bullish, ENA could reach $2.50.




Due to the tempting yield that Ethena offers, the token could see an increase in demand by 2025. If this were the case, the price of ENA could reach $5 before December of the same year.


By 2030, the value of ENA could be higher. However, it might not be five times higher than in 2029. Therefore, the price prediction for 2030 is $37.45.


Conclusion


Ethena project is currently profitable for these investors, but until when? Forecasts show us constant growth of the synthetic dollar protocol for the years to come but doubts remain. ENA is located in a stablecoin market targeted on all sides by regulators, so engaging in it must be done with full knowledge and caution.


The cryptocurrency world has long needed a decentralized base currency, independent of traditional banking infrastructure. Ethena addresses these issues by offering a scalable, censorship-resistant crypto-native currency that does not depend on traditional banking infrastructure. This initiative marks a significant step forward in crypto finance and contributes to the evolution of Ethereum towards a stable monetary asset.





 

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