Ethena (USDe)

At a glance

What it does

A delta-neutral position is a pair of trades whose gains and losses cancel when the price of the underlying asset moves. Ethena builds one for every USDe. When approved participants deposit collateral such as ETH, staked ETH or bitcoin, Ethena opens a short perpetual futures position of the same size on a derivatives exchange. If ETH falls, the short gains what the collateral loses, so the pair stays worth about one dollar.

The income comes from the hedge. The funding rate is a periodic payment between long and short traders on a perpetual future; when more traders want to be long, longs pay shorts. Ethena collects that payment, plus staking yield on staked ETH, and passes it to holders who lock USDe as sUSDe. The rate has swung widely: sUSDe paid about 55.9% a year in March 2024 and about 4.3% in August 2024.

USDe gives holders no statutory right to redeem one token for one dollar. Approved minters can create and redeem, and everyone else relies on arbitrage in the market.

Ethena has added a second line of business. USDtb, launched in December 2024, is backed mostly by BUIDL, BlackRock's tokenized money-market fund, and in July 2025 Ethena announced plans to issue it in the US through Anchorage Digital under the GENIUS Act. Ethena also builds stablecoins for partners, such as JupUSD for Jupiter on Solana, and committed 250 mn USD to Securitize's STAC fund.

How it is different

Fiat-backed issuers hold cash and Treasuries and keep the interest. Sky holds loans and collateral and pays a set rate. Ethena holds a hedge and passes market funding through to holders, so its yield is higher in bull markets and can turn negative. It is the only large dollar token whose backing sits mainly on crypto derivatives exchanges.

Where it fits

How a peg holds places USDe among the five peg designs. How stablecoin issuers make money compares sUSDe with other yield wrappers. The rules explains why USDe is not a US payment stablecoin. RWAs in DeFi covers USDtb and the use of tokenized Treasuries as stablecoin reserves. Related profiles: BlackRock, Securitize, Anchorage.

Risks and open questions

Funding can flip. When shorts outnumber longs, the hedge costs money instead of earning it, and sUSDe yield falls toward zero or below. Ethena keeps a reserve fund for those periods.

Exchange risk replaces bank risk. Collateral sits with custodians while positions sit on exchanges such as Binance, Bybit and OKX, so an exchange failure or a sharp dislocation hits the backing. On 10 October 2025 USDe lost its peg on Binance during a market crash, and supply fell sharply in the months after.

Regulators treat it differently from payment stablecoins. USDe is outside the GENIUS Act's payment-stablecoin category, so the yield ban does not apply to it by category, and Germany's BaFin acted against Ethena's German entity, closing its main EU route.

What to watch next

• Funding rates across major exchanges, which set both sUSDe yield and Ethena's growth.
• USDtb's supply and its US launch through Anchorage, which would give Ethena a regulated product next to USDe.
• Growth of partner stablecoins built on Ethena's stack.
• Whether the ENA fee switch, discussed in governance in August 2026, sends protocol revenue to token holders.