Portugal-based Ethena, a startup developing an internet savings bond as well as a new Ethereum-based stablecoin secured by derivatives, has raised $6 million in a seed funding round led by crypto-focused venture capital firm Dragonfly. The startup will use the capital toward the launch of its stablecoin and bond asset in the third quarter.

Other backers in the round included BitMEX founder Arthur Hayes and his family office, Maelstrom, and a handful of crypto derivatives exchanges, including Deribit, Bybit, OKX, Gemini and Huobi, among others.

Founded earlier this year, Ethena is working on two new products that will form a digital currency and savings platform. The fully collateralized stablecoin will have on-chain custody and settlement. The coin will maintain its peg to the US dollar by utilizing user-provided collateral to hedge the price exposure by betting against Ethereum using perpetual swaps. The setup aims to balance any losses or gains by either asset so that the stablecoin holds consistent at $1.

The second product is a digitally-native savings bond achieved through a bond token built on top of the stablecoin. The bond token functions in a similar way as a US Treasury but without the ties to a government or centralized banking institution.

“Ethena is building the holy grail of stablecoins: a coin that is truly stable, decentralized, and capital-efficient,” said Dragonfly general partner Tom Schmidt in the press release. “Stablecoins have grown massively in popularity over the past few years by providing access to USD-denominated savings and remittances for people around the world, but they've always been handicapped by one of these three issues. Ethena has a breakthrough design that remedies these issues while also benefiting a broad user-base. We're thrilled to be partnering with them to bring their vision to life."