Ethena: Next Generation Crypto Assets Stablecoin Project

1. Ethena Team Background

The Ethena team members have extensive expertise and practical experience in the fields of Crypto Assets, finance, and technology. Founder Guy Young worked at a large hedge fund before founding Ethena after the Luna collapse. Other core members also have experience working at well-known Crypto Assets companies and investment institutions.

According to public information, Ethena has completed three rounds of financing, with a total funding amount of 119.5 million USD. The investors include several well-known exchanges, market makers, and traditional financial institutions. This not only provides financial support for Ethena but also brings valuable industry resources.

2. Ethena Project Introduction

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 hedging positions.

Ethena's goal is to connect funds from the three areas of CeFi, DeFi, and TradFi through USDe, and to provide users with returns by leveraging the interest rate differences between these areas. If the scale of USDe is large enough, it may also promote the convergence of capital and interest rates among these three areas.

The minting and redemption of USDe can only be conducted by two independent legal entities on the whitelist, requiring BTC/ETH/ETH LSTs/USDT/USDC as collateral. Pricing comes from multiple sources, including centralized and decentralized exchanges, over-the-counter markets, and oracles.

To ensure the stability of USDe, Ethena adopts an automated delta-neutral strategy to hedge against the price fluctuations of the collateral assets.

The yield of sUSDe comes from Ethena's management of collateral, including deposit interest, funding fees for futures positions, and ETH staking rewards. These yields are distributed in the form of additional USDe when users redeem USDe.

USDe/sUSDe can be widely applied in the DeFi and CeFi sectors, such as being used as collateral for lending, margins, trading pairs, etc. iUSDe is launched for the traditional financial market, allowing traditional institutions to obtain high returns without directly interacting with Crypto Assets.

3. Innovations of Ethena

1. The use of a Delta neutral strategy to hedge against the price fluctuations of collateral assets is the first stablecoin project to employ this method.

2. High capital efficiency, with a collateral ratio close to 1:1, and stability is guaranteed.

3. Adopt the OES custody model to ensure asset security and avoid the risks of centralized exchanges and custodians.

4. Connect CeFi, DeFi, and TradFi to capture interest rate differentials and provide users with higher returns.

4. Current Status of Project Development

USDe has become the third largest US dollar stablecoin, with a circulation exceeding 5.5 billion dollars. Ethena's revenue is growing rapidly, making it the second fastest cryptocurrency startup to reach 100 million dollars in revenue.

Ethena has become an important part of multiple DeFi protocols, such as Pendle, Sky, Morpho, etc. At the same time, Ethena is building its own ecosystem and plans to launch a decentralized trading platform and on-chain trading protocol.

However, Ethena also faces some risks, such as unstable returns, the exchange's automatic deleveraging mechanism potentially affecting strategy effectiveness, and potential liquidity risks.

5. ENA coin Investment Analysis

The ENA token currently has a fully diluted valuation of approximately 5.6 billion USD, with a circulating market cap of 2 billion USD. Early investors still have considerable profits. In the coming months, more tokens will be unlocked, which may put pressure on the coin price.

Recently, the ENA price has performed weakly, having retraced about 70% from its peak. The upcoming token unlock bearish sentiment may have been partially reflected in the current price.

Overall, Ethena's coin price may be under pressure in the short term, but the core business of the project has long-term value.