Currency Name
ENA
Currency Type
Decentralized Stablecoin Protocol
Official Website
Ethena
Features
Decentralized stablecoin protocol, Delta neutral, USDe, governance token
Price
$1.43
Market Cap
$2,036,253,438
Market Cap Rank
54
Trading Volume
$1,300,916,287
Official Twitter
Ethena Labs (@ethena_labs)
Summary of ENA Currency, data from CoinMarketCap, in USD. (Updated 4/11/2024)
Table of Contents
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What is Ethena?
Ethena Stablecoin USDe
High APY of USDe
Ethena Strategic Financing Round
Ethena Initial Airdrop ENA
Ongoing Season 2 Campaign “Sats Campaign”
Additional Rewards for using designated exchanges and Web3 wallets
Ethena questioned by DeFi Pioneer
Ethena Risks
Ethena USDe related news (as of 4/11/2024)
Ethena
(ENA) is a decentralized stablecoin protocol launched on the Ethereum blockchain by the Ethena Labs project team. It focuses on “Delta neutral” and provides a stablecoin called USDe. Unlike traditional stablecoins like USDT and USDC, it achieves value stability through collateralized cryptocurrency assets and short positions in derivative contracts.
The so-called “Delta hedging” is a financial strategy to achieve “Delta neutrality” and reduce or eliminate the impact of asset price changes on portfolio value. In the case of USDe, it means that if the value of the collateral decreases, the system will protect its value through derivative trading to ensure the stability of USDe reserves.
When a user deposits approximately $100 worth of stETH, around 100 USDe will be minted after deducting the cost of executing the hedge. At the same time, Ethena Labs will use these stETH as collateral and open corresponding short-term perpetual contract positions on derivative exchanges to achieve hedging and ensure the stability of asset value.
It is worth emphasizing that Ethena Labs uses MPA custody services for collateral. These stETH will be custodized by off-exchange settlement service providers and will not be held on exchanges. This allows Ethena to entrust or cancel the collateralization to centralized exchanges without facing exchange-specific risks such as hacking or closure.
As of writing this article, the APY of USDe is as high as 37.1%. Where does this high interest rate come from?
USDe itself has two sources of income due to the mechanism of the Ethena protocol:
Passive income from pledging stETH and other LST (measured in ETH)
Funding rates or spreads from perpetual contract positions
The income of USDe comes from “pledge rate + market leverage demand.” Both of these income sources are variable and are easily further enhanced in a bull market. In addition, only those who pledge USDe can earn income. However, not all users will use USDe for pledging, which increases the rewards for pledgers.
On February 16, 2024, Ethena Labs announced the completion of a $14 million strategic financing round with a valuation of $300 million. The round was led by Dragonfly and BitMEX founder Arthur Hayes’ family office, Maelstrom.
In July of last year, Ethena Labs also completed a seed round of $6.5 million, led by Dragonfly, with participation from Deribit, Bybit, OKX, Gemini, and Huobi.
Ethena launched the airdrop activity of governance token ENA on April 2, 2024, and announced its listing on centralized exchanges. As of the time of writing on 4/11, ENA has been listed on centralized exchanges such as Binance, BYBIT, Bitget, BingX, HTX, and Bitfinex.
Ethena (ENA) will issue a total of 15 billion tokens, with 30% allocated to core contributors and investors (locked for 1 year), 25% for ecological development, and 15% for the Ethena Foundation. It is reported that the initial circulation of ENA is 1.425 billion tokens, and the total amount of this airdrop is approximately 750 million tokens.
Eligibility and quantity of the airdrop will be calculated based on Ethena Shard activity points (in addition, holders of SchizoPosters and Redacted Remilio Babies NFTs will also be eligible for the airdrop). The activity is expected to end on April 1, and any user who cancels the pledge, unlocks, or sells all USDe before this date will not be eligible for the airdrop. The airdrop will be distributed on April 2, and eligible participants will have 30 days to withdraw. Any unclaimed ENA after this period will be redistributed to users in the second season.
It should be noted that among the more than 90,000 users eligible for ENA distribution, wallet addresses ranking in the top 2000 by points and holders of Pendle’s YT token will be subject to lock-up restrictions. Initially, 50% will be distributed, and the remaining 50% will be linearly unlocked over the next six months. Wallet addresses ranking after 2000 will not have lock-up restrictions.
Ethena’s second season campaign, “Sats Campaign,” is currently underway, and readers can choose different ways to participate based on their risk tolerance. If you want to easily and stably receive the airdrop, you can choose to Lock USDe (lock USDe without interest and wait for 7 days to unlock, 20x points), hold USDe (purely hold USDe, 5x points), or stake USDe and hold sUSDe (enjoy 35% APY, but only 2x points). In addition, users who participated in the first season campaign and do not withdraw their principal will receive an additional 20% of points.
▶ If you find this article helpful,
click here to participate in the activity with the Ethena invitation code
!
Lock USDe in Binance, Bybit, OKX, and Bitget’s Web3 wallets for at least 7 days to receive a 20% bonus.
Andre Cronje, who was once hailed as the DeFi pioneer during the previous bull market, questioned the sustainability of the stablecoin protocol Ethena in the current market trend and sought opinions from the community on Twitter.
He said: “I see it being integrated into a protocol I consider low risk (probably referring to Maker), but based on my (possibly wrong) understanding, this new protocol (probably referring to Ethena) is very high risk. So, I don’t want to name and criticize, I want to ask those who are smarter than me, where did I go wrong in my understanding? I have read all available documents and read evaluations from others, but I still can’t see how the risks are mitigated.”
Andre Cronje’s tweet link
As a new decentralized stablecoin protocol, Ethena is not without risks. The risks that are commonly mentioned in the community include:
Smart contract risk (protocol itself)
External platform risk (exchanges)
Liquidity risk (possible lack of liquidity)
Funding rate risk (funding rate turning negative)
Custody risk (custody platforms)
Therefore, readers must consider the risks when participating in the project and avoid investing too much capital to prevent unexpected incidents.
Sanbi has compiled recent news articles we have reported on Ethena for readers to easily grasp recent events related to Ethena.
Ethena receives positive news one after another, ENA coin price stabilizes at $1.3
DeFi pioneer Andre Cronje questions Ethena: I don’t understand how it mitigates risks
Top 10 addresses for Ethena airdrop shipments? Season 2 campaign “Sats Campaign” ongoing
Stablecoin newcomer Ethena announces ENA token airdrop on April 2
Led by Dragonfly and BitMEX founder! Stablecoin project Ethena Labs launches point-based campaign
Distribution of 600 million DAI to USDe and sUSDe proposed by MakerDAO sparks controversy! Aave founder criticizes recklessness and proposes to cancel DAI collateral function
Diversifying the treasury and strengthening yield capabilities! MakerDAO considers distributing 600 million DAI to USDe and sUSDe
For more news about Ethena, you can refer to this page.
