PANews reported on April 24 that Ethena founder Guy Young posted on X platform, stating that many people misunderstood the relationship between Ethena and Tether - they are not competitors, but each other's growth will directly promote each other. In a market where about 70% of perpetual contracts are priced in USDT, every time Ethena adds a short position, it creates new demand for USDT, because the counterparty must use USDT as collateral to establish a long position. This mechanism means that for every additional dollar of USDe supported by perpetual contracts, it drives approximately $0.7 of USDT demand growth.
Young pointed out that Tether does not need to launch its own yield product because traders are already using USDT as collateral, paying 10%-30% annual interest rates to go long on perpetual contracts. Ethena is precisely the channel to convert this demand. Cryptocurrency market users are extreme, either pursuing ultimate liquidity or the highest returns. When interest rates drop, the middle ground that is "low liquidity but claims to be risk-free" will be eliminated. The trading domain needs more liquidity and distribution advantages than Tether, while the savings domain needs higher yields than Ethena, and the middle route is difficult to succeed. He believes that the "barbell strategy" formed by Tether and Ethena is the ultimate form of industry development.
