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ETH Ethena's $USDe is not a stablecoin in the traditional sense
According to Ethena's official documents,$USDe is a synthetic dollar asset that maintains price anchoring through Delta-neutral positions rather than holding fiat currencies as reserves. In practice, the agreement holds spot cryptocurrency as collateral while shorting a nominal amount of equivalent value in the perpetual contract market, thereby offsetting price fluctuations at both ends.
Analysis of revenue sources
Its revenue mainly comes from the structural mechanism of the perpetual contract market. When more traders bet on price increases, the market charges cyclical fees to long positions and pays short positions to ensure that continued contract prices are pegged to spot prices. Ethena was on the short side of the deal and charged these fees accordingly. In addition, pledge rewards for underlying collateral (mainly liquid pledge of Ethereum) constitute a second-level source of income. These two proceeds are ultimately passed on to the holders of sUSDe (the pledged version of $USDe).
Independent analysis by Coin Metrics pointed out that pledged USDe earns income from perpetual capital rates, ETH pledge rewards and liquid stablecoins, and its return rate is closely related to the exchange's capital dynamics and on-chain yields. Historically, sUSDe's annualized percentage return (APY) has typically fluctuated between single digits and above 30%, depending on how aggressive the market is in the bull direction.
Mechanism to respond to market reversals
The model only generates benefits in a market environment dominated by bulls. When market sentiment reverses and the proportion of short positions exceeds that of long positions, Ethena is not only unable to collect capital fees, but needs to pay capital fees. In this scenario, Ethena's reserve funds act as a buffer, absorbing the costs of negative funding rates and ensuring that pledgers do not receive negative returns. According to Ethena's documents, the reserve fund consists of a portion of seed money from the agreement and serves as the buyer of last resort when USDe faces decoupling pressure in the open market.
During these periods,@ethena converts more of its supporting assets into stablecoins, which, although its yields are lower, are more stable, close to short-term government bond yields. During the period when the reserve fund covers losses, although the pledgor has no income, the principal will not lose below zero. However, the strength of this protection depends entirely on the depth of the reserve fund. As Erena's own risk disclosures make clear, the fund is limited in size and long-term negative funding rates could eventually exhaust it.
This structure has higher transparency than many alternatives. Collateral positions are announced in real time, and the operating mechanism is also fully documented. But this gain is not passive income that is out of line with market conditions, but is directly determined by the level of leverage of the crypto market at any given moment.
