The initial target allocation for SOL is set between $100 million and $200 million, which would represent approximately 5-10% of SOL's global open interest.

Integrating LSTs is expected to enhance yield opportunities and strengthen the reserve structure of USDe.

Although Ethena's total value locked (TVL) peaked at $3.6 billion, it has since decreased to $2.4 billion due to capital outflows.

Ethena has recently allocated $46 million from its USDe reserve to invest in tokenized real-world assets, aligning with current DeFi trends.

Solana's DeFi ecosystem has seen significant growth, with a total value locked of $6 billion, making it the third-largest blockchain for DeFi.

Ethena Labs is proposing to incorporate Solana (SOL) as a collateral token for its synthetic stablecoin, USDe, alongside liquid staking tokens (LSTs) like BNSOL and bbSOL.

Currently, USDe holds a market capitalization of $2.6 billion, making it the fifth largest stablecoin, and aims to maintain its peg through advanced hedging techniques.

If the proposal is approved, Ethena could become one of the largest perpetual traders of SOL, potentially unlocking an additional $2-3 billion in open interest.

The integration of SOL could attract new liquidity and enhance Ethena's position in the competitive DeFi market.

If approved by Ethena's independent Risk Committee, the gradual integration of SOL into its collateral pool will begin with a targeted allocation of $100-200 million.

With a market cap of $2.5 billion, USDe is rapidly gaining traction and positioning itself as a competitor to established stablecoins like Tether.

The governance proposal aims to enable SOL as collateral for loan requests, which could increase Solana's utility and reduce selling pressure in a bull market.