Ethena vaults

Ethena is a synthetic dollar protocol that issues USDe and its staked, yield-bearing version, sUSDe. Unlike a fiat-backed stablecoin, USDe is backed by spot crypto hedged with short perpetual and futures positions of about the same size, so the combined position is delta-neutral, plus stablecoins and short-duration real-world assets that need no hedge. Its issuer is Ethena BVI Limited, and the USDe terms list BTC, ETH, SOL, liquid staking tokens, USDC, USDT and USDtb among the reserves. Only whitelisted counterparties that pass KYC checks can mint or redeem USDe directly; other holders trade it on exchanges and onchain pools.

sUSDe yield. Staking USDe returns sUSDe, whose value in USDe rises as rewards are added to the staking contract. Rewards are funded from protocol revenue: funding and basis spreads on the hedges, overcollateralised DeFi and institutional lending, tokenised government debt and credit, and stablecoin rewards. They are discretionary, paid by a subsidiary of the Ethena Foundation, and never negative, as loss-making periods are meant to be absorbed by a reserve fund. The same revenue also funds partner reward programmes.

Unstaking and eligibility. Unstaking starts a cooldown before USDe can be withdrawn, currently one to seven days depending on reserve conditions and set by governance; exiting sooner depends on secondary-market liquidity. sUSDe is not offered to residents of the EU or EEA, and the terms of service bar US persons from Ethena's app and services.

Fees and risks. Ethena does not currently charge fees for its app, although network fees apply, and approved minters pay only execution costs such as gas when minting or redeeming USDe. The main documented risks are persistently negative funding rates, liquidation of hedges, exchange failure, stablecoin depegs and the failure of the off-exchange custodians that hold the backing, currently Copper, Ceffu, Kraken and Anchorage Digital.