Ethena: Analysis of the Next Generation Stablecoin Project

1. Ethena Team Background

The Ethena team members have extensive expertise and practical experience in fields such as Crypto Assets, finance, and technology. Founder Guy Young previously worked at a hedge fund valued at $60 billion and founded Ethena after the Luna collapse. COO Elliot Parker was previously a product manager at a well-known investment firm and has also worked at a derivatives trading platform. APAC Institutional Growth Director Jane Liu has served as the head of research at an investment firm and was responsible for institutional partnerships at a staking protocol.

2. Financing Situation

According to public data, Ethena has completed three rounds of financing, with a total financing amount of 119.5 million USD. Major investors include several well-known venture capital firms. Ethena's investors encompass exchanges, market makers, and investment institutions with traditional financial backgrounds, providing rich industry resources for its business development.

3. Ethena Project Overview

Ethena is a synthetic dollar protocol that has launched the US dollar stablecoin USDe and the US dollar savings asset sUSDe. The stability of USDe is supported by Crypto Assets and corresponding Delta neutral hedging positions. The project aims to connect funds from centralized finance, decentralized finance, and traditional finance through USDe, capturing the interest rate differentials between these areas to provide users with higher returns.

USDe mechanism

The minting and redemption of USDe are limited to two independently incorporated entities that have passed the whitelist certification. The minting party must use BTC/ETH/ETH LSTs/USDT/USDC as collateral to interact with the contract. To ensure the stability of USDe, Ethena employs an automated, programmatic delta-neutral strategy to hedge against price fluctuations of the collateral assets.

sUSDe source of income

The yield of sUSDe mainly comes from Ethena's management of collateral, including deposit interest, funding rate income from hedging futures positions, and ETH staking rewards, etc. These yields are distributed in the form of additional USDe when users redeem USDe.

4. Innovations of Ethena

1. Delta Neutral Strategy: The first stablecoin project to adopt automated, programmatic Delta neutral hedging, effectively managing the price volatility risk of collateral assets.

2. High capital efficiency: Compared to other stablecoin projects, USDe's collateralization ratio is close to 1:1, while ensuring stability.

3. OES Custody Model: Uses an over-the-counter settlement model to effectively reduce risks for exchanges and custodians.

4. Cross-domain integration: Connecting centralized finance, decentralized finance, and traditional finance through USDe to provide users with higher yields.

5. Current Status of Project Development

As of March 2025, USDe has become the third largest dollar stablecoin in the market, with a circulation of over 5.5 billion dollars. Ethena has become an important component of multiple decentralized finance protocols and is building an ecosystem around USDe.

However, Ethena also faces some potential risks, including unstable returns, the exchange's automatic deleveraging mechanism that may affect strategy execution, and liquidity risks brought by partners.

6. ENA Token Investment Analysis

The ENA token currently has a fully diluted valuation of approximately 5.6 billion USD, with a circulating market cap of 2 billion USD. The project has completed three rounds of financing, and the valuation in the latest round has significantly increased compared to earlier stages. In the recent market adjustment, ENA has performed relatively weakly, but in the long term, Ethena's core business still has growth potential.