Coin columns · Ethereum City (Capital)
Ethena USDe: A Synthetic Dollar Held at One Dollar by Futures Hedges
Launched in 2024: collateral, hedging, yield and risks
Ethena’s USDe is a “synthetic dollar”: instead of bank deposits or Treasury bills, it pairs crypto collateral with an equal short futures position to stay near one dollar. Its yield and its risks therefore differ from those of fiat-backed stablecoins.
1. Who built it
USDe was created by Ethena Labs, founded by Guy Young, and opened to the public on Ethereum in February 2024. The idea of a dollar built from matched spot and futures positions is often traced to a 2023 essay by BitMEX co-founder Arthur Hayes on a “Nakamoto Dollar”. The governance token ENA followed in April 2024.
Staking USDe gives sUSDe, whose exchange rate against USDe rises as the protocol earns income. Only approved, identity-checked firms mint and redeem directly, while everyone else trades on exchanges. On the Crypto Nation map, USDe stands in Ethereum City (the capital), where it was first issued.
2. How the dollar value is kept
When an approved firm deposits coins such as ether or bitcoin, Ethena sells an equal amount of perpetual futures, contracts with no expiry. Gains on the short offset losses on the collateral, and vice versa, so the total stays roughly constant (“delta neutral”). Part of the backing is held in liquid stable assets such as USDC and USDtb.
Income comes from “funding” payments that futures buyers pay sellers in bullish markets and from staking rewards on collateral such as staked ether. The collateral sits with off-exchange custodians such as Copper and Ceffu to limit exchange-failure risk. A reserve fund covers periods of negative funding.
3. Uses and milestones
USDe and sUSDe are widely used as collateral and yield products in decentralised finance (DeFi), on Aave and Pendle among others, and several centralised exchanges accept USDe as margin. LayerZero technology carries it across many chains, which helped it spread quickly.
In December 2024 Ethena launched USDtb, a separate stablecoin backed by BlackRock’s tokenised fund BUIDL, and in 2025 it teamed up with the federally chartered Anchorage Digital Bank to fit the US stablecoin law, the GENIUS Act. USDe supply tends to swell when funding rates are high and shrink when markets cool.
4. Things to know
The main risks are long periods of negative funding and failures at an exchange or custodian. In the crash of 10 October 2025, USDe showed far below one dollar on Binance’s internal price feed, triggering liquidations there, while Ethena said redemptions and other markets worked normally. Exchange-specific collateral pricing can amplify stress.
Regulators treat USDe as a synthetic dollar, not a fiat-reserve stablecoin. After Germany’s BaFin found problems at Ethena’s German entity in 2025, that entity wound down its European business, leaving USDe outside the EU’s MiCA framework. Yields change with market conditions, and the principal is not guaranteed.
Written from information public up to October 2026. It does not recommend or rate any coin and is not investment advice. If something is wrong, please tell us through the contact page.