(Bloomberg) -- Ethena, a crypto project whose dollar-pegged coin has ballooned to become one of the biggest of its kind since its launch a year ago, has raised $100 million to help fund the introduction of a similar token aimed at traditional financial institutions.
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The fundraising, which hasn’t been previously reported, was completed in December and drew investors including Franklin Templeton and F-Prime Capital, the venture capital firm affiliated with Fidelity Investments, according to a person with knowledge of the matter.
Ethena runs two cryptocurrencies: ENA, which is a so-called governance token that gives owners a say in the project; and USDe, which is marketed as a “synthetic dollar” and currently offers holders a 9% yield. USDe’s circulation has swelled to almost $6 billion as booming crypto prices allowed Ethena to offer returns that at one point reached 60%.
A foundation supporting the project sold ENA tokens to the investors at an average price of just under 40 US cents each, said the person, who asked not to be identified discussing private information. ENA’s price soared to around $1.30 in mid-December but has since crashed almost 70%, according to CoinGecko data.
Beyond big-name financial backers, the project has established connections in the US halls of power. World Liberty Financial, a crypto project promoted by US President Donald Trump and his sons, said in December that it had entered into a strategic partnership with Ethena Labs, the startup behind the project. Trump campaigned as a crypto advocate, and launched his own memecoin just before returning to the White House.
Ethena Labs declined to comment on the token sale. Dragonfly Capital Partners, Polychain Capital LP and Pantera Capital Management LP, three of the biggest crypto venture capital funds, also participated in the funding round, people with knowledge of the matter said.
A spokesperson for F-Prime declined to comment. Franklin Templeton didn’t respond to a request for comment. Dragonfly, Pantera and Polychain declined to comment.
Yield-Generating Mechanism
The USDe token is backed by a reserve of digital assets, including stablecoins like USDT and USDC, by far the biggest such cryptocurrencies. That’s a crucial difference from USDT and USDC, which are mainly backed by highly liquid and safe assets like US Treasury bills. Crypto data trackers CoinGecko and CoinMarketCap classify USDe as a stablecoin.