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What is the best crypto to buy?
Ondo Finance (ONDO) and Ethena (ENA) have become two of the fastest growing blockchains in the industry. Their tokens have reached a market capitalization of over $1.6 billion and $1.3 billion, respectively. So, which is the best buy between ONDO and ENA?
What is Ondo Finance?
Ondo Finance is a leading player in the tokenization sector. Backed by Founders Fund, Coinbase and Pantera, the network runs two tokenized funds that allow people to earn returns: USDY and OUSG. US Dollar Yield (USDY) has accumulated over $250 million in assets, providing users with an APY of 5.20%.
On the other hand, the US Treasury token (OUSG) has accumulated over $215 million in assets and has an APY of 4.96%. Ondo generates returns by investing in funds managed by Blackrock and PIMCO. It also uses regulated service providers such as StoneX and Ankura to ensure users receive daily accounting.
Although USDY and OUSD are not classified as stablecoins, holders believe they are better than Attached USDT and USD coin. Indeed, even if the owners of USDT and USDC invest in public and commercial papers, they do not receive a share of the profits. If you hold $10,000 in USDT in ten years, you will receive the same amount.
What is Aethena?
Ethena is a blockchain project that has been compared to Terra, which collapsed in 2022. Indeed, Ethena provides USDe, a new stablecoin that has over $2.8 billion in assets and nearly 200,000 users. It is backed by DragonFly, Arthur Ayes and Binance.
USD stablecoin holders are making fortunes. While Ondo’s USDY has an APY of 5.20%, USDe has a yield of over 35.9%. This is a higher return than most companies pay out to their investors.
USDe uses a fairly complex approach to generating returns. He first makes money by staking Ethereum, which generates a return of less than 3%. It then opens short derivatives when users create the USDe stablecoin. When this happens, it results in a mismatch between the positive funding rate and the basis spread earned by participants selling the delta exposure.
Overall, Ethena uses complex derivatives and leverage that most analysts consider a bit risky, especially if something goes wrong. For example, Ethena was thrust into the spotlight after speculation that Bybit, a major player in its ecosystem, was insolvent.
Better to buy between Ondo and Ethena?
Ondo Finance and Ethena
Ondo and Ethena are relatively new crypto tokens that began trading earlier this year. Going forward, their performance will depend on the general performance of the crypto sector and the demand for their underlying assets: OUSG, USDY and USDe.
However, due to the risks associated with USDe, I think ONDO is a safer bet. Also as mentioned Before, stablecoin USDe could be banned in the United States if the Lummis-Gillibrand regulatory bill passes the House and Senate. This bill would ban all algorithmic stablecoins to prevent an event similar to the Terra Luna collapse.