Ethena: Next Generation Crypto Assets Stability System

1. Background of the Ethena Team

The Ethena team members have extensive expertise and practical experience in the fields of Crypto Assets, finance, and technology. The founder has worked at a large hedge fund, the COO previously held positions at well-known investment firms and derivatives trading platforms, and the institutional growth director for the Asia-Pacific region also has rich industry experience.

2. Financing Situation

Ethena has raised a total of $119.5 million, attracting the attention of many well-known investment institutions. The investors include exchanges, market makers, and traditional financial background investment institutions, providing financial support and industry resources for Ethena's development.

3. Ethena Project Overview

Ethena is a synthetic dollar protocol that has launched the stablecoin USDe and the savings asset sUSDe. The stability of USDe is supported by crypto assets and the corresponding delta-neutral hedge positions.

Ethena aims to connect funds from the three domains of CeFi, DeFi, and TradFi through USDe, capturing interest rate differentials to provide users with higher returns.

4. USDe Mechanism

The minting/redemption of USDe is carried out by coiners within the whitelist, using BTC/ETH/ETH LSTs/USDT/USDC as collateral. Pricing comes from multiple sources, including exchanges, OTC markets, and oracle.

The stability of USDe is maintained by hedging the price fluctuations of Backing Assets, using an automated Delta neutral strategy.

5. Sources of sUSDe Earnings

The yield of sUSDe comes from Ethena's disposal of collateral, including deposit rates, funding rates, and staking rewards. These earnings are distributed to users in the form of additional USDe when they redeem.

6. Uses of Stablecoins

USDe/sUSDe can be used as collateral, margin, and trading pairs in the DeFi space. In the CeFi space, USDe can be used as a trading pair. iUSDe is aimed at the traditional financial market, allowing regulated traditional companies to participate.

7. The Innovations of Ethena

1. Use Delta neutral strategy to hedge the price fluctuations of Backing Assets.
2. Higher capital efficiency
3. The OES Custody Mode ensures asset security
4. Integrating traditional finance to expand the scale of USDe

8. Current Status of Project Development

USDe has become the third largest dollar stablecoin, with a circulation exceeding 5.5 billion US dollars. Ethena has become an important component of multiple DeFi protocols and is building an ecosystem around USDe.

However, Ethena also faces some risks, such as unstable core yields, the ADL mechanism of CEX potentially affecting strategies, and partners possibly bringing liquidity risks, among others.

9. ENA Coin Investment Analysis

ENA currently has an FDV of 5.6B and a circulating market cap of 2B. It is about to face some unlocking pressure, and the coin price may come under pressure in the short to medium term, but the core business of the project has long-term value.