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 Coin, data from CoinMarketCap, in USD. (Updated on April 11, 2024)
Table of Contents:
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What is Ethena?
Ethena Stablecoin USDe
High APY of USDe
Ethena Strategic Funding Round
Ethena Initial Airdrop of ENA
Ongoing Second Season Campaign “Sats Campaign” by Ethena
Additional Rewards for Using Designated Exchange Web3 Wallets
Ethena Criticized by DeFi Pioneer
Ethena Risks
Ethena USDe Related News (as of April 11, 2024)
Ethena (ENA) is a decentralized stablecoin protocol launched by the Ethena Labs project team on the Ethereum blockchain. It focuses on “Delta Neutral” and provides a stablecoin called USDe. Unlike traditional stablecoins like USDT and USDC, USDe stabilizes its value through collateralized crypto assets and short positions.
The so-called “Delta Hedging” is a financial strategy to achieve “Delta Neutrality” and reduce or eliminate the impact of asset price fluctuations 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, after deducting the cost of executing the hedge, approximately 100 USDe will be minted. 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 should be emphasized that Ethena Labs uses MPA custody services for collateral. These stETH will be held in settlement service providers outside of exchanges, allowing Ethena to entrust/cancel the collateral to centralized exchanges without facing exchange-specific risks such as hacking or closure.
At the time of writing, the APY of USDe is as high as 37.1%. Where does this high interest rate come from?
The mechanism of the Ethena protocol itself provides two sources of income for USDe:
Passive income from staking stETH and other LST tokens (measured in ETH)
Funding rates or spreads from perpetual contract positions
The income of USDe comes from “staking rate + market leverage demand.” Both of these income sources are variable and are easily boosted during bullish markets. In addition, only those who stake USDe can earn income, but not all users will stake USDe, which increases the rewards for stakers.
Ethena Labs announced the completion of a strategic funding round with a valuation of $300 million and $14 million raised on February 16, 2024. The round was led by Dragonfly and the office of Arthur Hayes, the founder of BitMEX, Maelstrom.
Last July, Ethena Labs also completed a seed funding round of $6.5 million, led by Dragonfly, with participation from Deribit, Bybit, OKX, Gemini, Huobi, and other institutions.
Ethena launched the airdrop activity of governance token ENA on April 2, 2024, and announced its listing on centralized exchanges. As of the writing of this article on April 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 ENA tokens, with a 30% allocation for core contributors and investors (locked for 1 year), 25% for ecological development, and 15% for the Ethena Foundation. It is reported that the initial circulating supply of ENA is 1.425 billion tokens, and the total airdrop amount 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 staking, 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 reallocated to users in the second season activity.
It should be noted that among the 90,000+ users eligible for ENA distribution, wallet addresses ranked in the top 2000 by points and holders of Pendle’s YT token will be subject to lock-up restrictions. 50% of the initial distribution will be released, while the remaining 50% will be linearly unlocked over the next six months. Wallet addresses ranked after 2000 will not have lock-up restrictions.
Ethena’s second season campaign “Sats Campaign” is currently ongoing, and readers can choose different ways to participate based on their risk tolerance. To easily and stably receive the airdrop, one 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 activity will receive an additional 20% points if they do not withdraw their principal.
By locking USDe for at least 7 days through the Web3 wallets of Binance, Bybit, OKX, and Bitget, one can receive a 20% bonus reward.
Andre Cronje, who was hailed as the DeFi pioneer in the previous bull market, questioned the sustainability of the stablecoin protocol Ethena after the market trend changed and sought opinions from the community on April 3. He stated: “I see it being integrated into what I consider low-risk protocols (possibly referring to Maker), but based on my (possibly incorrect) understanding, this new protocol (probably referring to Ethena) has very high risks. So, I don’t want to name and criticize, I want to ask those who are smarter than me, where did I misunderstand? I have read all available documents and evaluations from others, but I still can’t see how the risks are being mitigated.”
Ethena, as a new decentralized stablecoin protocol, is not without risks. The risks most commonly mentioned in the community are:
Smart contract risk (protocol itself)
External platform risk (exchanges)
Liquidity risk (insufficient liquidity)
Funding rate risk (negative funding rate)
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.
Sangbi has compiled recent news about Ethena, making it easy for readers to keep up with recent events related to Ethena.
Ethena receives positive news, ENA price stabilizes at 1.3 USD
DeFi pioneer Andre Cronje questions Ethena: I don’t understand how it mitigates risks
Top 10 airdrop addresses of Ethena ships at lightning speed? Second season 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 points campaign
MakerDAO’s exposure to 600 million USD USDe sparks controversy! Aave founder criticizes recklessness and suggests canceling DAI collateralization
Diversifying the treasury and strengthening revenue capabilities! MakerDAO considers allocating 600 million DAI to USDe and sUSDe
For more news about Ethena, please refer to this page.
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