Ethena

Ethena is the organization behind USDe, a dollar-denominated token that is not backed by bank deposits. Its own documentation warns that USDe "is not a fiat stablecoin" like USDC or USDT, because it is backed by crypto assets and matching short futures positions, so its risks are different. Holders can stake USDe into sUSDe to receive a share of protocol revenue.

Several legal entities share the work. The website and the USDe services are operated by Ethena (BVI) Limited, registered in Road Town, Tortola, which is also the company that whitelisted firms mint with and redeem from. Ethena OpCo Ltd. runs ENA distributions and the sUSDe staking contract, and the documentation says sUSDe is maintained by a subsidiary of the Ethena Foundation. Ethena Italia S.r.l. holds an Italian VASP registration with the OAM; the terms say the group is otherwise not registered with any regulator.

Ethena was founded in 2023 by Guy Young, according to a CoinShares interview published in July 2026; he previously spent six years at Cerberus Capital Management. The project's documentation traces the idea to Arthur Hayes's March 2023 essay "Dust on Crust", which proposed a synthetic dollar built from crypto collateral and derivatives.

Ethena also distributes USDtb, a separately structured dollar stablecoin that, as of October 2025, is issued by Anchorage Digital Bank, and sells a white-label service that lets other firms launch their own branded dollar tokens on its infrastructure.

The core trade is a basis position. When a whitelisted firm mints USDe with, say, ether, Ethena keeps the ether and opens a short perpetual futures position of the same size. If ether falls, the short gains what the spot holding loses, so the combined position stays close to its dollar value. When funding rates are positive, short holders are paid, which is the main source of revenue in strong markets.

Backing is no longer mostly crypto. When funding is low, Ethena shifts into cash-like assets: its governance update for July to September 2026 reported that on 12 October 2026 about 74% of backing was liquid cash, 17% hedged bitcoin and ether, and 6% tokenized real-world-asset funds. The protocol also lends to DeFi markets and institutions, and its documentation describes a basis trade on non-crypto futures as a further strategy.

Backing assets sit with off-exchange settlement providers such as Copper and Ceffu rather than on the exchanges themselves. The custodian delegates collateral to an exchange to margin the shorts, and profit and loss settle frequently (daily, in Copper's case). This is meant to limit what Ethena would lose if an exchange failed, but it does not remove the exposure to the custodian or to the exchange's derivatives market.

Revenue does not automatically flow to holders of plain USDe. Only staked sUSDe receives rewards, paid into the staking contract every eight hours and vested over the following eight. In periods when revenue is negative, the documentation says the reserve fund absorbs the cost instead of the backing. Governance currently sends 0% of revenue to the reserve fund, which stood at $62.57 million on 12 October 2026, against a recommended $45.7 million.

Ethena does not charge holders a fee to hold USDe. For whitelisted mint and redeem users, the USDe terms say Ethena BVI charges no fee for minting or redeeming beyond reimbursing gas and execution costs, unless a fee is disclosed before the transaction. Retail holders who buy or sell on decentralized exchanges or centralized exchanges pay that venue's trading fees and spread.

ENA is the governance token. Holders vote on backing composition, new strategies, revenue allocation and the membership of the Risk Committee, and can stake ENA into sENA, which has an unstaking cooldown. The token was generated on 5 March 2024. The tokenomics page allocates 30% to core contributors and an investor share on a one-year cliff (25% after a year) followed by three years of monthly vesting, and 30% to ecosystem development and airdrops.

A fee switch that directs revenue to ENA holders passed a Snapshot vote in the third quarter of 2026. The governance update describes revenue capture rising from 5% when 14-day average USDe supply is $7.5 billion to 20% at $20 billion, with up to 95% of that net revenue used for ENA buybacks. At about $4.6 billion of supply in October 2026, the lower trigger had not been reached.

Direct minting and redemption are limited to approved market-making counterparties that pass KYC and KYB checks and are whitelisted with Ethena BVI. A Mint User can redeem USDe for supported assets worth its pro rata share of reserves, up to $1 per token. Anyone else holding USDe is a "Holding User" under the terms and has no right to redeem with Ethena until onboarded; in practice they sell into on-chain pools or exchange order books.

The terms of service bar the United States, Russia, Iran, North Korea, Venezuela and about 30 other jurisdictions. Staking into sUSDe is not offered to anyone habitually resident or registered in the European Union or European Economic Area. That restriction followed Germany's BaFin action in 2025 against Ethena GmbH, the group's former EU entity.

Ethena lists seven risk categories in its documentation: funding, liquidation, custodial, exchange failure, backing assets, stablecoin-related and margin collateral. Funding risk is the one most specific to this design. Using data that predates the protocol, its documentation reports that funding was negative on 17.5% of days for ether and 15.9% for bitcoin, with a longest negative streak of 13 days.

Control is centralized at the contract level. The documentation's role matrix shows the owner and admin roles on Ethena-controlled multisigs, which can add or remove collateral assets and custodian addresses, and 20 minter and redeemer addresses that are externally owned accounts controlled by Ethena. At least three gatekeeper addresses, which are to include outside organizations, can pause minting and redemption.

The contracts have been audited repeatedly. Ethena lists Zellic on version 1, Quantstamp and Spearbit (both completed 18 October 2023), Pashov (22 October 2023, May 2024 for version 2, September 2024 for sENA), a public Code4rena contest (13 November 2023), Chaos Labs on economic design, and Quantstamp, Cyfrin and Pashov on USDtb in October 2024. Its audits page still describes an Immunefi bug bounty as upcoming. An audit covers code, not the custodians, exchanges or hedging.

Reserves are reported in two ways: a proof of reserves, published about weekly and checked by HT Digital, LlamaRisk and Chainlink (the latest dated 23 October 2026 when we checked), and monthly attestations from custodians. Neither is a financial audit of the issuer. Readers comparing dollar tokens on these points can see how USDe compares with other stablecoins, and our piece on stablecoins becoming payment plumbing covers the wider field.

Unstaking sUSDe starts a cooldown during which USDe sits in a silo contract before it can be withdrawn. The cooldown is now dynamic, within a range of one to seven days, and stayed at one day throughout July to September 2026. sUSDe can also be sold on secondary markets without waiting, but Ethena says neither it nor the Foundation arranges those markets.

Plain USDe has no cooldown. For a non-whitelisted holder, exit means selling for USDC, USDT or fiat on a market, at whatever price that market offers. The October 2025 episode showed what that can mean on a single venue: USDe briefly traded at 0.65 USDT on Binance while redemptions continued for whitelisted firms. Readers who keep USDe on an exchange should note that exchange's own price feed can matter as much as the backing.

USDe supply peaked at about $14.8 billion on 4 October 2025, according to DefiLlama, then shrank by roughly two-thirds over the following year as redemptions continued and backing moved toward cash.

• March 2023: Arthur Hayes publishes "Dust on Crust", cited by Ethena as its origin.
• 5 March 2024: ENA token generated; contributor and investor vesting starts.
• March to April 2025: BaFin halts and then orders the wind-up of Ethena GmbH's USDe business in Germany.
• October 2025: USDtb issuance moves to Anchorage Digital Bank.
• 10 to 11 October 2025: Binance-specific depeg to 0.65; about $1.9 billion redeemed in two days.
• Third quarter 2026: dynamic sUSDe cooldown in place at one day; ENA fee switch approved; supply between $3.90 billion and $5.00 billion.