Ethena Labs

Ethena Labs is a decentralized protocol built on Ethereum, offering a synthetic dollar (USDe) that functions independently of traditional banking infrastructure. The protocol also introduces the “Internet Bond,” a globally accessible, dollar-denominated rewards instrument. Ethena’s mission is to provide a scalable, crypto-native solution for stable money, combining financial innovation with decentralized technology.

What is Ethena?

Ethena’s core product is the synthetic dollar, USDe, which is backed by Ethereum and Bitcoin collateral through delta-hedging derivatives. USDe is fully-backed and can be freely composed across centralized (CeFi) and decentralized finance (DeFi) platforms. The protocol aims to maintain stability through its use of collateral and futures positions, ensuring a stable value reference against crypto assets.

USDe Peg Stability

Ethena ensures the stability of USDe by employing delta-hedging strategies. This involves using derivatives positions against the collateral held by the protocol, allowing it to offset fluctuations in the value of the underlying crypto assets like Ethereum and Bitcoin. This strategy helps maintain a stable value for USDe despite crypto market volatility.

Internet Bond

The Internet Bond is an innovative on-chain financial instrument, offering rewards derived from staked assets such as staked Ethereum, as well as profits from futures and perpetual markets. It represents the first crypto-native solution that combines decentralized finance rewards with stable money.

Launch Features

Ethena offers several key features for users:

• Permissionless Acquisition of USDe: Users can acquire USDe by trading on external automated market maker (AMM) pools, exchanging assets such as USDT and USDC for USDe.
• Direct Minting and Redemption of USDe: Market-making counterparties can mint USDe by depositing reserve assets or redeem USDe by burning it, subject to KYC/KYB checks.
• Staking USDe: Users in permitted jurisdictions can stake USDe and earn protocol revenue as rewards.

Summary

Ethena Labs provides a robust, decentralized solution for stable money through USDe, supported by delta-hedged collateral. The protocol’s Internet Bond brings a novel, crypto-native investment vehicle, enhancing liquidity and stability in decentralized finance. Ethena aims to disrupt traditional finance by offering an on-chain alternative to stable money, suitable for both DeFi and CeFi participants.