🏁Competitive Analysis
Umoja Yield Synths have the best risk mitigation of any synthetic dollar.
The following provides a competitive analysis of Umoja's Yield Synths and Ethena's USDe synthetic dollar:
Last updated
Umoja Yield Synths have the best risk mitigation of any synthetic dollar.
The following provides a competitive analysis of Umoja's Yield Synths and Ethena's USDe synthetic dollar:
Last updated
| Ethena (USDe) | Umoja Yield Synth | |
|---|---|---|
Yield
Ethena relies on stETH yield and ETH perpetual funding rates, and is unable to sit out the market during periods of negative ETH funding rates.
We expect the Umoja Yield Synth will have a higher yield because:
1. Diversification: We can direct capital towards those tokens with the most favorable funding rates
2. Flexibility: Unlike Ethena, we are not forced to stay in a short perpetual position as a result of our protocol design.
Principal Protection
A period of sustained negative funding rates, could theoretically see the Ethena insurance fund depleted in a relatively short time.
The Umoja Yield Synth can sit out the market in times of negative funding rates, preserving dollar principal protection.
Arbitragability
Ethena offers a large and inflexible target for sophisticated investors and hedge funds to aim to arbitrage against, particularly in ETH perpetual markets.
The Umoja Yield Synth can flexibly generate funding yield from a variety of different tokens, making it much harder for sophisticated traders to arbitrage against our trading flows.