Elixir, a decentralized network that powers liquidity across orderbook exchanges, announced the creation of deUSD, a synthetic U.S. Dollar asset that provides a decentralized alternative to Ethena Labs’ centralized USDe. Elixir has $1 billion in liquidity lined up to back the new yield-bearing deUSD, as well as support from prominent DeFi partners, including Pendle, which is tokenizing and creating a market for Elixir’s Apothecary program.
In addition to decentralization, Elixir’s deUSD offers a number of advantages over Ethena’s USDe, including the ability for staked deUSD to collect yield and remain stable in times of extreme negative funding.
“The network Elixir has built and stress-tested over the past 2 years is well suited to power a truly decentralized synthetic stable asset. deUSD has been built with transparency and resiliency as its core features, removing dependency from basis-related market trends and unstable sources of yield,” said Philip Forte, Founder and CEO of Elixir Labs.
Since opening its Apothecary program for ETH deposits, Elixir has accumulated over $300 million USD in Total Value Locked in 3 months, not including the $1 billion in soft-circled capital for deUSD leading into mainnet launch which is forecasted to launch in September 2024.
Currently, users supply ETH to the Apothecary to mint a cross-chain liquidity provider token, backed 1:1 with ETH, and in the process can earn Elixir points called Potions. The elxETH is then made available as collateral for decentralized orderbook exchanges such as Vertex, Bluefin, RabbitX, dYdX, ApeX, Orderly Network, SynFutures and more.
To give more flexibility to exchanges, Elixir has teamed up with partners including decentralized exchanges including Vertex, RabbitX, Orderly Network, Bluefin and others to convert its ~70,000 staked ETH to the backing of new synthetic stablecoin deUSD.
Similar to Ethena’s USDe, Elixir’s deUSD is a fully collateralized synthetic dollar, created by using stETH as collateral to short ETH in a delta-neutral position. In the long-term future, assets other than ETH will be supported as well.
deUSD stakers can receive additional yield on top of basis yield, in the form of exchange incentives for supplying liquidity.
In partnership with Elixir, Pendle is tokenizing the Apothecary’s “potion” program. Pendle will break the Potions into two different markets – one for users who want to buy and sell Potions directly, and another for users who are only interested in the Potions’ ETH staking yield.
With the launch of deUSD, Apothecary depositors now have the option to commit to minting deUSD using their deposited ETH once DEX support goes live, or withdrawing their ETH at that time. All remaining ETH in the Apothecary contract will be withdrawable or convertible at any time in the future.
Elixir’s deUSD will have significant advantages over USDe, including:
- Decentralization: Elixir’s network can power decentralized execution with verifiable proofs of execution, open source code, and liquidity – all non-custodial and on-chain without relying on centralized parties. In the long term, anyone will be able to mint deUSD with stETH and other forms of collateral.
- Reduced basis exposure in negative funding: The protocol can still collect yield and remain stable even in negative-funding environments, via a reduction of the basis trade into MakerDAO’s T-Bill protocol (eg. sDAI). The conversion is based on pre-set triggers linked to the balance of Elixir’s Over-Collateralization Fund (OFC). The sloped decline of the OFC ensures that backing of deUSD will also be greater than one. Conversely, as basis trade profitability increases and the OFC begins growing again, the protocol begins adding more long-funding rate exposure to capture yield.
- Natively yield-bearing stable collateral for the Elixir ecosystem: deUSD will be the preferred collateral within the Elixir ecosystem, with top orderbook DEXes Vertex, RabbitX, Bluefin, Orderly Network, and others accepting it as collateral on their exchange.
Elixir opened the Apothecary in mid-March at the same time it announced the completion of a Series B funding round that brought Elixir’s valuation to $800 million. Mysten Labs and Maelstrom co-led the $8 million funding round, which also included participation from Manifold, Arthur Hayes, Amber Group, Validation Cloud, Flowdesk and others.
In total, Elixir has raised over $17 million, including a $7.5 million Series A round in October 2023, led by HackVC, and a January 2022 seed round of $2.1 million, with support from FalconX, Commonwealth, Chapter One, Ava Labs and Arthur Hayes.
To learn more about Elixir and participate in the Apothecary program, visit elixir.xyz. Stay up-to-date with Elixir developments on Twitter.
About Elixir
Elixir is a modular DPoS network built to power liquidity on orderbook exchanges. When natively integrated by an exchange, Elixir enables users to supply liquidity to their orderbooks. The network also allows exchanges to build other trustless products to enhance their liquidity. To date, Elixir has raised more than $17 million across several funding rounds, with the latest being a Series B at a $800 million network valuation, co-led by Mysten Labs and Maelstrom. Other supporters include Hack VC, FalconX, Arthur Hayes, Amber Group, GSR and more.
Elixir Network has the ambition to become the ubiquitous modular liquidity layer that powers all Layer 1 and Layer 2 ecosystems and the exchanges that are built on top of them.
Website: https://elixir.xyz/
X (Twitter): https://twitter.com/elixir