Ethena

Ethena issues USDe, which its documentation describes as a synthetic dollar backed with crypto assets and corresponding short futures positions rather than a fiat-backed stablecoin. The protocol states that each unit of USDe is backed by assets held by the protocol, and that revenue can come from delta-neutral basis trades in crypto and non-crypto markets, DeFi lending, institutional loans, tokenized real-world assets and stablecoin holdings. [1]

Volatile backing assets are paired with short futures positions of approximately the same notional size, so that price moves in the spot holdings are offset by the hedge. Backing assets remain onchain with off-exchange custody providers and are delegated, not transferred, to derivatives venues for margining. Slippage and execution fees are included in mint and redeem prices, and Ethena states it earns no profit on minting or redeeming. [2]

sUSDe is the staked form of USDe. Holders are eligible for reward distributions, the USDe value of sUSDe rises as rewards accrue, and a Reserve Fund is intended to absorb periods of negative protocol revenue. The documentation lists funding, liquidation, custodial, exchange-failure, backing-asset, stablecoin and margin-collateral risks as distinct categories. [3]