DeFi protocol Ethena on Tuesday announced a new partnership with Derive.xyz, the world’s leading platform for on-chain options and structured products, with a multi-million dollar investment to improve liquidity and drive growth for both protocols.
Under the partnership, Ethena will integrate Derive’s core trading, options, futures and vaults, leveraging Ethena’s USDe stablecoin and USDE’s deployment to increase liquidity and trading volume, according to the press release shared with CoinDesk.
Ethena will commence basic trading on Derive perpetual markets, pending approval by the Ethena Risk Council. This is expected to increase Derive’s volumes and liquidity, strengthening Derive users’ ability to execute large orders at stable prices.
In conjunction with this, the Lyra Foundation, which oversees the Derive protocol, will receive a multi-million dollar grant from the Ethena Foundation, and staked ENA (sENA) holders will be rewarded with 5% of the DRV tokens awarded to the Ethena Foundation. . The ENA token is a governance token for the Ethena ecosystem.
“Integrating Ethena’s immense liquidity and strong user base with Derive.xyz’s unparalleled derivatives protocol not only unlocks significant opportunities for Derive.xyz users, but also positions it as the premier on-chain derivatives platform,” said Nick Forster, founder of Derive.xyz. said.
“Together we are setting new standards in DeFi and offering innovative solutions that serve both retail and institutional traders. Prepare for the next generation of breakthrough on-chain derivatives, liquidity and financial products,” Forster added.
Derive said it integrates USDe as collateral, allowing users to trade while earning passive returns. Ethena’s USDe is a synthetic dollar, which uses a hedged cash-and-carry strategy, also known as basic trading, and collateralized stablecoin to maintain the $1 price peg.
The on-chain derivatives protocol is also debuting vaults for holders of staking USDe (sUSDe), allowing them to earn a reward by combining Ethena’s stake proceeds with Derive’s structured product strategies.
Ethena has over $4 billion in TVL at the time of writing, with over 300,000 users and integrations with the largest centralized exchanges such as Deribit and ByBit.
Meanwhile, Derive, with a TVL of $79 million, is the world’s largest decentralized protocol, enabling programmable on-chain options, perpetuals and structured products. The native token DRV will go live on January 15, the protocol’s spokesperson told CoinDesk.