Ethena: The Next Generation Crypto Assets Federation System

1. The Team Background of Ethena

The Ethena team has a rich background in Crypto Assets, finance, and technology. The founder has worked at large hedge funds, the COO has experience at well-known investment firms and derivatives exchanges, and the head of the Asia-Pacific region has held key positions at multiple Crypto Assets companies.

According to public information, Ethena has completed three rounds of financing, with a total financing amount of nearly 120 million USD. The investors include several well-known exchanges, market makers, traditional financial institutions, etc., providing Ethena with financial support and industry resources.

2. Ethena Project Overview

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 corresponding Delta neutral hedge positions.

Ethena aims to connect centralized finance, decentralized finance, and traditional finance through USDe, capturing the interest rate differences among these areas to provide users with higher returns. In the long run, the scale growth of USDe may facilitate capital flow and interest rate convergence between these three sectors.

The minting and redemption of USDe can only be conducted by two legal entities on the whitelist, requiring specific Crypto Assets as collateral. To ensure accurate pricing, Ethena uses multiple sources to verify pricing information. The stability of USDe is maintained through an automated Delta neutral strategy.

The yield from sUSDe comes from Ethena's operations on the collateral, including deposit interest, funding rate income from futures hedging positions, and staking rewards, among others. These yields will be distributed in the form of additional USDe when users redeem.

USDe and sUSDe have wide applications in the decentralized finance sector, serving as collateral for lending platforms, trading margins, and more. In centralized exchanges, USDe can be used as the quoted currency for trading pairs. To address the traditional financial market, Ethena has launched iUSDe, allowing traditional institutions to obtain related returns without directly engaging with Crypto Assets.

Three, the innovations of Ethena

1. The first project to implement automated, programmatic Delta neutral hedging to hedge against price fluctuations of collateral assets.

2. High capital efficiency, with a collateral ratio close to 1:1, while ensuring stability through hedging strategies.

3. Adopting the OES custody model ensures asset security and avoids single point risks from centralized exchanges and custodians.

4. Connect traditional finance and Crypto Assets markets to capture interest rate differentials and provide users with higher returns.

IV. Current Status of Project Development

Ethena's USDe has become the third largest dollar stablecoin by market capitalization, with an issuance exceeding $5.5 billion. The project's revenue is growing rapidly, making it the second fastest startup in the Crypto Assets industry to reach $100 million in revenue.

USDe has become an important component of multiple decentralized finance protocols, holding a significant share on platforms such as Pendle, Sky, and Morpho. Ethena is building an ecosystem around USDe and plans to launch a decentralized trading platform and on-chain trading protocol.

However, Ethena also faces some risks, including the instability of returns, the potential impact of the centralized exchange's automatic deleveraging mechanism on hedging strategies, and liquidity risks that may arise from partners.

5. ENA Coin Investment Analysis

The fully diluted valuation of the ENA token is currently about $5.6 billion, with a circulating market cap of $2 billion. This represents a significant increase compared to the early financing valuation.

The token unlocking plan will be gradually rolled out in the coming months, which may put pressure on short-term prices. Recently, the ENA price has underperformed the market, which may have partially reflected the impact of the upcoming token unlocking.

Overall, the Ethena project may face pressure on coin prices in the short term, but its core business model has long-term value.