Stablecoin Project Ethena Labs Bags $4M for USDe Treasury

Stablecoin project Ethena Labs has bagged over $4 million for its treasury less than two weeks after going live, showcasing early signs of success with a concept that has divided market participants.

The firm’s USDe, a synthetic dollar that aims to be pegged to $1 by shorting ether (ETH) futures, yielded over 68% annualized on deposits as of Friday. It could keep $4 million for its treasury after paying out users, head of growth @MacroMate8 said on X, increasing the treasury amount to over $16 million from nearly $12 million.

The earnings have catapulted Ethena to the third-largest revenue generator in the crypto market behind the Tron and Ethereum blockchains.

Ethena’s high yields are derived mainly from the high ether-future funding rates, as well as staking ether to a validator, which generates less than 4% yearly as of Friday.

Funding rates refer to payouts made to traders who either long, bet on, go short, or bet against the price of any asset. Longs pay short when prices go up, as they borrow capital from the market to place bigger bets, and vice versa.

Users can deposit stablecoins, such as tether (USDT), frax (FRAX), dai (DAI), Curve USD (crvUSD) and mkUSD to receive Ethena’s USDe, which can then be staked. Unstaking takes seven days. The staked USDe tokens can be supplied to other DeFi platforms to earn an additional yield.

DefiLlama data shows that the total value locked on Ethena has grown to $833 million as of Friday, up from $300 million in mid-February after its public launch.