Andre Cronje, the mind behind Fantom, has raised red flags concerning the stability of Ethena Labs’ USDe (CRYPTO:USDE), fearing it might lead to a disaster akin to the Terra-Luna (CRYPTO:LUNA) fiasco.

Recognised as a pivotal figure in decentralised finance (DeFi), Cronje's concerns stem from the incentive mechanisms associated with USDe, which, he argues, could eventually result in the creation of an "unbacked asset."

He voiced these worries without directly naming the protocol or its synthetic dollar, focusing instead on the issues tied to the funding rates in perpetual futures contracts. On April 3, Cronje took to social media to express his apprehension about the risk management strategies employed by Ethena Labs.

His cautionary stance towards USDe began shortly after its launch on February 19, when it offered an annual percentage yield (APY) of 27.6%, a figure alarmingly higher than the 20% provided by the since-collapsed Terra UST's Anchor protocol.