Analysis: If the market value of USDe does not exceed 3 billion USD, the current reserves are sufficient to cope with a negative interest rate situation for a period of time

ChainCatcher news, the crypto data analysis platform CryptoQuant published an analysis article stating that as long as the market capitalization of USDe remains below $3 billion (currently $2.4 billion), its reserve fund ($32.7 million) can cope with a period of negative funding rates.

CryptoQuant pointed out that even during bear markets, funding payments are mostly positive (Ethena generates income), and the reserve fund can grow. However, extreme events such as the collapse of the FTX trading platform (during which long-term funding rates were affected) could lead to a significant reduction in the reserve fund within days.

To safely respond to special events that may cause significant negative funding rates at larger market capitalizations of $5 billion, $7.5 billion, or $10 billion, the reserve fund needs to be increased to approximately $400 million, $600 million, and $800 million, respectively.

Previously, according to DefiLlama data, due to a brief negative funding rate situation in the contract market after the market decline, Ethena experienced negative income for the first time last week, amounting to $1.05 million, with the negative income primarily occurring on April 11, when a negative income of $1.38 million was generated that day.