Summary
USDe is a synthetic stablecoin that maintains its $1 value through the cash-and-carry trade, avoiding directional risk. Unlike asset-backed stablecoins, USDe’s value is not secured against dollars or government debt.
Key Points
1. USDe is a synthetic stablecoin that maintains its $1 value through a financial technique called the cash-and-carry trade.
2. Unlike asset-backed stablecoins like tether (USDT) and USDC, USDe does not have its value secured against dollars or dollar-equivalents such as U.S. government debt.
3. The cash-and-carry trade involves buying an asset and simultaneously shorting a derivative of the asset to collect the funding rate, without carrying directional risk.