What is Ethena (ENA)?

Ethena provides a crypto-native, scalable money solution with its synthetic dollar, USDe, backed by spot assets through delta-hedging with perpetual futures contracts and liquid stablecoins (USDC, USDT). USDe maintains a relatively stable value with reference to spot crypto assets and futures positions; liquid stablecoins enhance delta-hedging efficiency and offer protection in bear markets. sUSDe is the reward-accruing version of USDe, sharing protocol revenue through staking.

In 2024, BTC funding rates averaged 11%, ETH 12.6%; sUSDe APY averaged 19%. Ethena offers an alternative to USD stablecoins in the stablecoin market; in Q2 2024, stablecoins settled $8.5 trillion on-chain. Stablecoins account for 90% of spot/futures trading and over 70% of on-chain settlements, making them one of the largest crypto assets.

Centralized stablecoins (USDC, USDT) carry traditional finance risks; overcollateralized stablecoins are tied to Ethereum leverage demand; algorithmic stablecoins show mechanism fragility. Ethena creates a scalable dollar via derivatives, offering a $20 billion+ opportunity across DeFi, CeFi, and TradFi.

Ethena (ENA)’s Purpose

Ethena captures crypto’s largest opportunity with a crypto-native synthetic dollar and the first “internet bond,” inspired by Arthur Hayes’ “Dust on Crust” vision in March 2023. Stablecoins are crypto’s core instrument, with over 100 million users, proven product-market fit, the largest addressable market, and revenue potential. USDe reduces reliance on traditional banking rails, offering an alternative to fiat-backed centralized stablecoins.

Ethena integrates stablecoins across DeFi, CeFi, and TradFi, providing a reward-bearing dollar with sUSDe. Its network grows with members like Ethereal (perp/spot exchange), Strata (perp risk tranching), Terminal (spot exchange), Echelon (universal lending), and Derive (options/structured products); sENA accrues ecosystem token airdrops in a BNB-like model.

How Ethena (ENA) Works

USDe is backed by spot assets with on-chain custody and centralized liquidity venues, using delta-neutral hedging to manage spot asset risk with perpetual futures contracts. Example: A whitelisted user provides ~$100 USDT and receives ~100 USDe; the protocol opens a short perpetual position of the same notional value. Backing assets are transferred to “Off Exchange Settlement” solutions, flowing between custody and exchange only for funding or realized P&L.

Delta Neutrality: Backing asset price risk is hedged with a short position; changes in backing asset value are offset 1:1 by the hedge. USDe requires 1:1 collateralization.

Off Exchange Custody: Backing assets are held in institutional-grade solutions, minimizing exchange risk.

Protocol Rewards: sUSDe is obtained by staking USDe, earning from three sources: perpetual futures funding, system usage, and future integrations.

Staking USDe: Stake/unstake via UI; the transaction is signed, submitted to the blockchain, and upon confirmation, sUSDe/USDe is atomically swapped. Holding sUSDe is sufficient; rewards accrue in the staking contract, increasing sUSDe value. Unstaking has a 7-day cooldown; early sUSDe/USDe ratio is 1:1, increasing with rewards. Token vault mechanism (similar to Rocketpool’s rETH); staked amount may grow.

Staking ENA: Stake/unstake via UI; the transaction is signed, submitted to the blockchain, and upon confirmation, sENA/ENA is atomically swapped. Holding sENA is sufficient; rewards accrue in the staking contract, increasing sENA value. Unstaking has a 7-day cooldown + sENA unstake cooldown. In late 2024/early 2025, unclaimed Season 1 airdrop ENA was distributed; as of September 2025, no distributions are active or announced.

Position Locking: Lock/unlock via UI; the transaction is signed, submitted to the blockchain, and upon confirmation, the cooldown begins. After the cooldown, a “Withdraw” transaction is signed and confirmed to receive tokens. USDe has a 7-day cooldown, sENA has a 7-day cooldown + unstake cooldown, LP tokens have a 21-day cooldown (some LP tokens immediate).

ENA Governance: ENA governs the Ethena protocol and critical decisions; biannual Risk Committee elections and future additional committees. ENA holders delegate daily decisions to expert stakeholders; Snapshot forum and voting page. Risk Committee: Kairos Research, Llama Risk, Ethena Labs Research, Steakhouse Financial, Blockworks Advisory, Credio (Untangled). sENA holders vote on ENA tokenomics and ENA-specific proposals. The community voted on Ethereal, SOL backing, and Reserve Fund RWA allocations; BlackRock BUIDL received the highest allocation.

sENA Rewards: sENA is the liquid receipt token for locking ENA, composable in DeFi. It receives unclaimed Season 2 airdrop ENA, rewarding users aligned with long-term growth. It earns rewards from Ethereal and Ethena Network members; Ethereal commits 15% of future token supply to sENA. Rewards page for details.

Restaked ENA: Generalized restaking pools with Symbiotic; sENA provides economic security for USDe cross-chain transfers via LayerZero DVN messaging. First layer for Ethena Network and on-chain financial applications.

Ethena (ENA) Tokenomics

ENA is the Ethena protocol governance token. Total supply: 15 billion.

Allocation:

• 30% Core Contributors (1-year 25% cliff, 3-year linear monthly vesting; no unlock before cliff),

• 25% Investors (1-year 25% cliff, 3-year linear monthly vesting; no unlock before cliff),

• 25% Foundation (expanding USDe reach, development, risk assessments, audits),

• 20% Ecosystem Development and Airdrops (10% Season 1/2 airdrop, remainder for cross-chain initiatives, exchange partnerships; DAO multisig).

Core Contributors and Investors unlock began at ENA TGE on March 5, 2024.

Ethena (ENA) Investors

Ethena raised $136.5 million (valuation $300 million). Tier 1: Dragonfly, Polychain Capital, Pantera Capital, YZi Labs, Galaxy, Delphi Ventures. Tier 2: OKX Ventures, GSR, Hashed, CMT Digital, Mirana Ventures, Wintermute, Nascent, MEXC Ventures. Tier 3: Maelstrom, HTX Ventures, Foresight Ventures, Castle Island Ventures, Brevan Howard Digital, Strobe Ventures, Franklin Templeton Investments, Faction, Gemini, No Limit Holdings, Avon Ventures, Deribit. Tier 4: F-Prime Capital. Others: Anthony Sassano, Cobie, Nic Carter.

Ethena (ENA) Team

Ethena team: Guy Young (Founder), Zach Rosenberg (General Counsel), Conor Ryder (Head of Research), Elliot Parker (Head of PM), Brian Grosso (Head of Engineering), Seraphim Czecker (Head of Growth).

Official Links

• Website
• X (Twitter)
• Whitepaper

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Ethena surpassed $14 billion in a short time thanks to USDe and yield-bearing sUSDe. This situation shows that investors are not only looking for stable value, but also aiming for profit.

Ethena’s Innovative Stablecoin Strategy

Ethena’s USDe stablecoin operates using a delta-neutral hedging method. It maintains a stable price of $1 by pairing crypto collateral with short-term perpetual futures contracts. USDe‘s market value has reached $13.2 billion, making it the third-largest dollar-pegged crypto asset. The product generates returns through staking and derivatives, setting it apart from USDT and USDC. Additionally, Mega Matrix’s $2 billion purchase of ENA tokens further solidifies the protocol’s institutional investor support.

This may interest you: What Is Ethena USDe (USDe)?

Regulatory Framework and Institutional Adoption

The UAE’s regulatory structure facilitates the institutional adoption of projects such as Ethena. For example, VARA, CARF, and SCA bring licensing and compliance in line with international standards. Thanks to this transparent environment, major institutions such as BlackRock, Franklin Templeton, and Fidelity are also participating in the project.

Bridging Traditional Finance

Ethena aims to integrate with traditional finance in its 2025 roadmap. It also plans to provide annual returns of around 20% to fixed-income portfolios with its iUSDe product. In addition, it aims to reach billions of users through Apple Pay integration and a Telegram mini app. In this way, the protocol aims to bridge the gap between DeFi and TradFi.

Ultimately, M2 Capital’s investment and Ethena’s strategic advances are boosting corporate crypto adoption in the Middle East while also strengthening the region’s vision of becoming a global crypto hub.cajn

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What is Ethena’s Liquid Leverage?

Liquid Leverage, developed by Ethena Labs, allows users to deposit a balanced mix of sUSDe and USDe tokens—50% each—into Aave. By doing so, users can earn additional promotional rewards on USDe, which currently offers approximately 12% APY, alongside the standard USDe lending rate and the native APY of sUSDe.

Eligibility for Liquid Leverage Rewards

To qualify for the Liquid Leverage rewards on USDe deposits, users must meet the following criteria:

• Deposit both sUSDe and USDe, with rewards capped to 50% of the USDe supplied (any additional USDe will not earn rewards).

• Borrow stablecoins such as USDC, USDT, or USDS—borrowing USDe itself disqualifies rewards.

• Execute at least one “loop” transaction, meaning borrowing stablecoins against sUSDe and USDe and then redepositing those assets back into Aave.

Ethena Labs recommends utilizing Aave’s sUSDe e-mode, which now accepts both USDe and sUSDe as collateral, improving capital efficiency starting from the launch date.

Key Innovations of Liquid Leverage

One of the main issues sUSDe users faced before was the mandatory 7-day unstaking cooldown. Liquid Leverage addresses this by maintaining at least half of the user’s position in sUSDe while allowing the USDe portion to provide flexibility and risk management.

Rewards and Earnings

Eligible users can claim their Liquid Leverage rewards via the Merkl.xyz platform. The first rewards claim will be available approximately one week after integration launch, with subsequent claims possible every 8 to 12 hours.

Additionally, the current USDe Ethena rewards rate will be adjusted after one month for most money market integrations. Users who loop sUSDe and USDe/eUSDe PT tokens while holding the underlying Yield Token (YT) position will also earn points on their YTs.

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Since its launch a year ago, the cryptocurrency project Ethena, which has become one of the largest dollar-based cryptocurrencies, raised $100 million to finance the promotion of a similar token targeting traditional financial institutions.

The previously undisclosed fundraising was completed in December and attracted investor interest.

WLFI and ENA Strategic Partnership

As we previously knew, World Liberty Financial (WLFI), supported by Donald Trump, had made significant partnerships to increase its influence in the DeFi ecosystem. Recently, WLFI strengthened its position in the sector by establishing strategic alliances with various projects.

So, what have WLFI & ENA been working on?

WLFI’s long-term partnership with Ethena Labs takes the company’s impact in the DeFi world to the next level. The first step of this partnership involves using Ethena’s interest-bearing sUSDe token as collateral within the WLFI protocol. Furthermore, Ethena and WLFI plan to integrate sUSDe as the first new token supported by the Aave protocol.

The statement also mentioned that even if the governance vote results in a negative outcome, the parties would continue to pursue their partnership. This highlights the strength of the collaboration between WLFI and ENA, showing their determination to maintain the partnership despite potential obstacles.

Regardless of the governance vote result, both parties emphasize their commitment to working together to achieve their long-term goals.

This move aims to leverage Ethena’s large user base and high total value locked (TVL). As mentioned earlier, the strong strategic moves of both Ethena and WLFI are designed to boost their impact in the DeFi space.

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