# Introducing Ethereal: Request to Ethena Governance on Integration **URL:** \ **Category:** General\ **Created:** [September 30, 2024, 3:22am UTC](https://gov.ethenafoundation.com/t/introducing-ethereal-request-to-ethena-governance-on-integration/154 "2024-09-30T03:22:02Z")\ **Posts on this page:** 1\ **Showing post:** 1
**Author:** ![Fells0x](https://yyz1.discourse-cdn.com/flex003/user_avatar/gov.ethenafoundation.com/fells0x/32/90_2.png) [@Fells0x](https://gov.ethenafoundation.com/u/Fells0x)\ **Post date:** [September 30, 2024, 3:22am UTC](https://gov.ethenafoundation.com/t/introducing-ethereal-request-to-ethena-governance-on-integration/154/1 "2024-09-30T03:22:02Z")
## Summary This proposal introduces Ethereal: an integrated spot & perpetual futures DEX built on the upcoming [Ethena Network](https://mirror.xyz/0x29a99F7Fe080F72223dAd48D5E1E86670a984326/odrjQynMr3PrtRhCzHa2k7tcdNIpibJLyRe7yXY944Q) using USDe. We are requesting that Ethereal be directly integrated into Ethena-related reserve management from launch to provide a fully onchain venue for management of spot and derivative positions backing USDe. In addition to expanded utility and demand for USDe, the Ethena community will also stand to benefit from a 15% allocation of any potential Ethereal governance token in the future should this proposal pass. We propose this potential allocation go to circulating ENA holders. This proposal will outline synergies between Ethereal and Ethena, and more importantly seek the Ethena community’s support for an integration with Ethereal in the coming months. ## Background _ **Ethereal Overview** _ Ethereal V1 (testnet expected in Q4) is an L3 EVM appchain settling to the Ethena Network. This architecture aims to optimize for the benefits of isolated blockspace as well as the synergies with the Ethena ecosystem. In addition to a fully onchain exchange engine, Ethereal can support deployment of additional applications utilizing USDe to unlock specific features which can augment the functionality of the core DEX (e.g. borrow/lend markets). Ethereal is designed to match centralized exchange performance while maintaining complete self-custody and flexibility to support features such as cross-margin, liquidity automation, and portfolio margin. Ethereal’s architecture is capable of processing 1 million operations per second with sub-20ms latency, in-line with the most performant exchanges. Ethereal contributors include teams with decades of collective experience across web2, web3, and traditional finance, including several years as lead contributors to one of the most successful DEX protocols in the space. ## Benefits to the Ethena ecosystem 1. Demand. Ethereal offers a new avenue to expand USDe growth and adoption. With Ethena’s inventory acting as a deep supply/demand buffer, Ethereal could offer some of the most liquid and cost effective onchain spot & perpetual futures markets available today. Increased demand for Ethereal products built on top of USDe can unlock new sources of demand for USDe. 2. Decentralization. Migrating USDe backing management to onchain venues can improve transparency and unlock new mechanisms available to the Ethena protocol. 3. Alignment. The Ethena community will also stand to benefit from a 15% allocation of any potential Ethereal governance token in the future, which will help to ensure alignment between Ethena and Ethereal community stakeholders. 4. Precedent. A digital dollar alongside a native reward-bearing composable asset like sUSDe enables a wide design space for new financial primitives to be built. Ethereal’s launch will provide the blueprint for other applications built using USDe on the Ethena Network, helping to drive Ethena’s transformation from an asset issuer to a platform for financial innovation. ## What Ethereal is Requesting Ethereal’s highest priority is to be aligned with the Ethena community as a partner invested in the growth and adoption of USDe in DeFi. We are requesting support from the Ethena community for an integration with Ethereal as a venue for executing hedging transactions, subject to satisfactory technical due diligence conducted by the Ethena Foundation and Risk Committee. In addition, we would request technical support for the deployment of Ethereal onto the Ethena Network to implement an integration with Ethena’s hedging engine. We believe there is potential for a mutually beneficial, symbiotic relationship based on the synergies outlined above that can provide tangible value to the Ethena community. --- _[View the full topic](https://gov.ethenafoundation.com/t/introducing-ethereal-request-to-ethena-governance-on-integration/154)._