Stablecoin infrastructure company StablecoinX has completed its merger with TLGY Acquisition Corp, a publicly traded special purpose acquisition company, which will see it begin trading on the Nasdaq on Friday.
StablecoinX is the first public stablecoin infrastructure company focused on supporting the Ethena ecosystem through decentralized validator nodes and software infrastructure, and will trade under the symbol “USDE” According to until Thursday’s statement.
“We believe Ethena has become one of the most important platforms powering the next generation of digital dollars,” said Edward Chen, CEO and President of StablecoinX.
The Nasdaq debut is a huge bet that stablecoins are becoming the backbone of global finance, and comes despite a broader crypto bear market and Ethena’s relatively miniature 1.4% share of the stablecoin market compared to shares offered by its competitors such as Tether and Circle.
Ethena’s USDe is a yield-yielding synthetic stablecoin pegged to the dollar. Unlike USDt (USDT) or USDC (USDC), which are backed by actual dollars, USDe (USDE) is pegged to $1 through a derivatives strategy.
It is backed by cryptographic collateral in Bitcoin and Ether and tiny futures positions on the same assets, so long and tiny positions sleek out price volatility, helping to keep its value at around $1.
Ethena’s delta neutral strategy works well in normal markets, but is vulnerable during periods when futures funding rates turn negative.
USDe supply is falling
While stablecoin trading has surged in recent years, USDe’s market capitalization has fallen 70% since its peak in October to around $4.5 billion today, ranking it sixth among stablecoins.
USDe supply has declined since the peak of the bull market. Source: CoinGecko
There are also approximately 3 billion Ethena (ENA) governance tokens in the StablecoinX vault, representing approximately 20% of the total supply worth approximately $275 million. Business announced $360 million capital raise to purchase EAW on Sunday.
However, the asset is currently trading at $0.08, down 94% from its all-time high in April 2024.
Related: Profitable stablecoins soar as Washington struggles for profitability
The company has three lines of business: a decentralized validator node (DVN) serving as a cross-chain message validator for the Ethena ecosystem, a middleware stack called “Stablecoin Harness”, and distribution services that are currently in development.
The company says the three companies strengthen each other, albeit in the broader context of cryptocurrencies bear market constitutes a tough background for a debut on the Nasdaq stock exchange.
Crypto SPACs and crypto treasuries have gone through a coarse patch this year as the broader market is down 52%, $2.3 trillion has left the space since October, and cryptocurrencies have fallen out of favor among investors.
On Thursday, the pre-merger TLGY value fell 6.93% on OTC markets, ending the day at USD 9.40, According to to Google Finance data.
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