Add support for sUSDe on Venus Protocol Ethereum Core Pool

Summary

sUSDe (Staked USDe) is a yield-generating synthetic dollar introduced by Ethena Labs. It is built on Ethereum and designed to maintain a stable value through delta-hedging strategies, ensuring its peg to the USD. sUSDe accrues value over time as protocol-generated revenue accumulates within its staking contract. Users can stake their USDe to receive sUSDe on Ethena. We propose to list sUSDe on Venus Protocol Ethereum Core Pool.

Motivation

Stable Value: sUSDe is designed to provide stability through delta-hedging, making it a reliable asset in volatile markets. Yield Generation: Staking USDe to receive sUSDe allows users to earn a yield, increasing the appeal of this asset. Liquidity: sUSDe has shown significant adoption with over $50 million in liquidity on platforms like AAVE and Curve. Integrating sUSDe can enhance Venus Protocol’s liquidity and user engagement. Decentralization and Innovation: sUSDe promotes decentralization and innovative financial mechanisms, bypassing traditional banking systems. Market Acceptance: With extensive use and a robust economic model, sUSDe is positioned to drive significant volume and utility within Venus Protocol. DeFi Integrations: sUSDe is integrated across various DeFi platforms such as AAVE, Balancer, Curve, FRAX, OpenOcean and Uniswap contributing to its liquidity and market acceptance. Risks

Smart Contract Risks: As with any new token, there are inherent smart contract risks. However, sUSDe has undergone multiple audits and follows stringent security measures. Liquidity Constraints: Initial integration might face liquidity constraints, but the extensive liquidity of USDe on other platforms mitigates this risk. Market Risks: Volatility in the underlying collateral could affect sUSDe’s stability, although delta-hedging strategies are designed to minimize this risk. Benefits

Attract more users to Venus and enhance its overall liquidity. The integration of sUSDe could also enhance the protocol’s operational efficiency and stability.

By diversifying the range of stablecoin assets available, Venus could reduce its reliance on any single stablecoin, thereby mitigating risks associated with market fluctuations and potential Depeg in any one specific token.

Furthermore, the addition of sUSDe would increase interoperability between different DeFi platforms, fostering a more connected and seamless ecosystem.

Background

Ethena Labs has developed sUSDe as a part of its innovative suite of DeFi products. sUSDe is fully collateralized and its stability is maintained through automated delta-hedging strategies. It has been proposed for integration into AAVE V3 on Ethereum, highlighting its potential to enhance DeFi liquidity and stability. The proposal emphasizes the strategic benefits of incorporating sUSDe, including enhanced yield generation and market adoption.

Specifications

Contract Address: 0x9d39a5de30e57443bff2a8307a4256c8797a3497 Oracle & Price Feeds: Implementation expected with Pyth & Redstone. Yield Mechanism: Based on delta-hedging strategies, ensuring stable value and yield generation. Community Involvement

We recommend that the Venus community support this proposal and, if agreed, request Chaos Labs to analyze and provide risk parameters for the safe integration of sUSDe into Venus Protocol.

This proposal aims to enhance the Venus Protocol by integrating a stable, yield-generating asset that supports the broader goals of liquidity, stability, and innovation in DeFi. We look forward to the community’s feedback and the successful adoption of sUSDe.