16 Apr, 24

What is Ethena Finance?

ethena finance banner


Ethena Finance (ENA/USDe) is emerging as a notable player in the cryptocurrency and decentralized finance (DeFi) sectors. Powered by its proprietary stablecoin, USDe, Ethena aims to offer a synthetic dollar that operates across various DeFi applications without relying on traditional financial infrastructure.

Ethena Finance was mentioned as a trade idea for the latest edition of the Weekly Crypto Market Wrap, released every Monday in your inbox and our Insights section. Subscribe below to get weekly expert crypto insights.

Ethena’s Core Technology

Ethena operates on the Ethereum blockchain, employing a delta-neutral strategy to maintain the stability of its synthetic dollar, USDe. This approach involves minting USDe against staked Ethereum or its derivatives, while simultaneously opening short positions in derivatives to counteract the volatility of the underlying collateral​. This ensures that the value of USDe remains stable despite fluctuations in the value of the collateral.

Ethena Tokenomics and Distribution

The total supply of Ethena’s native token, ENA, is capped at 15 billion. The initial circulating supply is about 1.425 billion tokens. The distribution includes allocations for core contributors, ecosystem development, investors, and a foundation that supports further initiatives to expand USDe’s reach​.

Market Performance and Adoption

Since its launch, Ethena has shown impressive market adoption with a total value locked (TVL) of over $1.5 billion in just under two months. This rapid growth underscores the market’s confidence and the perceived stability of the USDe as a synthetic stablecoin​.

Unique Features and Challenges

Unlike traditional stablecoins, USDe is not backed by fiat currency but by crypto assets, which introduces unique risks and challenges. These include exposure to derivative market risks and the need for rigorous counterparty risk management. Nonetheless, Ethena leverages these mechanisms to offer competitive yields and facilitate growth within the DeFi space​.


Ethena Finance is carving out a niche in the DeFi landscape by providing a crypto-native stablecoin solution that leverages complex financial strategies to maintain currency stability and generate yields. Its innovative approach, combined with rapid adoption, suggests a promising future, although it also faces challenges typical of the volatile cryptocurrency market.


  1. What blockchain does Ethena use?
    • Ethena operates on the Ethereum blockchain, utilizing ERC-20 standard tokens for its operations.
  2. How does Ethena maintain the stability of its synthetic dollar?
    • Ethena uses a delta-neutral strategy, minting USDe against collateral while opening equivalent short derivative positions to mitigate the impact of collateral volatility.
  3. What is the total supply of Ethena’s ENA tokens?
    • The total supply is capped at 15 billion ENA tokens.
  4. How quickly did Ethena achieve significant TVL?
    • Ethena amassed a TVL of $1.5 billion within two months of its launch.
  5. What are some risks associated with Ethena’s USDe?
    • Risks include exposure to derivative market fluctuations, counterparty risks, and the potential for partial centralization due to some operations on centralized exchanges

About Zerocap

Zerocap provides digital asset liquidity and digital asset custodial services to forward-thinking investors and institutions globally. For frictionless access to digital assets with industry-leading security, contact our team at [email protected] or visit our website www.zerocap.com


This material is issued by Zerocap Pty Ltd (Zerocap), a Corporate Authorised Representative (CAR: 001289130) of AFSL 340799. Material covering regulated financial products is issued to you on the basis that you qualify as a “Wholesale Investor” for the purposes of Sections 761GA and 708(10) of the Corporations Act 2001 (Cth) (Sophisticated/Wholesale Client). This material is intended solely for the information of the particular person to whom it was provided by Zerocap and should not be relied upon by any other person. The information contained in this material is general in nature and does not constitute advice, take into account the financial objectives or situation of an investor; nor a recommendation to deal. Any recipients of this material acknowledge and agree that they must conduct and have conducted their own due diligence investigation and have not relied upon any representations of Zerocap, its officers, employees, representatives or associates. Zerocap has not independently verified the information contained in this material. Zerocap assumes no responsibility for updating any information, views or opinions contained in this material or for correcting any error or omission which may become apparent after the material has been issued. Zerocap does not give any warranty as to the accuracy, reliability or completeness of advice or information which is contained in this material. Except insofar as liability under any statute cannot be excluded, Zerocap and its officers, employees, representatives or associates do not accept any liability (whether arising in contract, in tort or negligence or otherwise) for any error or omission in this material or for any resulting loss or damage (whether direct, indirect, consequential or otherwise) suffered by the recipient of this material or any other person. This is a private communication and was not intended for public circulation or publication or for the use of any third party. This material must not be distributed or released in the United States. It may only be provided to persons who are outside the United States and are not acting for the account or benefit of, “US Persons” in connection with transactions that would be “offshore transactions” (as such terms are defined in Regulation S under the U.S. Securities Act of 1933, as amended (the “Securities Act”)). This material does not, and is not intended to, constitute an offer or invitation in the United States, or in any other place or jurisdiction in which, or to any person to whom, it would not be lawful to make such an offer or invitation. If you are not the intended recipient of this material, please notify Zerocap immediately and destroy all copies of this material, whether held in electronic or printed form or otherwise.
 Disclosure of Interest: Zerocap, its officers, employees, representatives and associates within the meaning of Chapter 7 of the Corporations Act may receive commissions and management fees from transactions involving securities referred to in this material (which its representatives may directly share) and may from time to time hold interests in the assets referred to in this material.  Investors should consider this material as only a single factor in making their investment decision.

Like this article? Share
Latest Insights

16 Apr, 24

What is the CBDC Anti-Surveillance State Act?

On May 23, 2024, the U.S. House of Representatives passed the CBDC Anti-Surveillance State Act. This legislation, introduced by Congressman Tom Emmer, aims to prevent

16 Apr, 24

Blockchain Fintech Solutions: Bridging the Ecosystems

Blockchain technology is revolutionizing the financial technology (fintech) landscape by providing innovative solutions to longstanding challenges. As the demand for more secure, transparent, and efficient

16 Apr, 24

How is Bankrupt FTX Paying Back Its Customers?

FTX, once a major player in the cryptocurrency exchange market, filed for bankruptcy in November 2022 following revelations of significant mismanagement and fraudulent activities. The

Receive Our Insights

Subscribe to receive our publications in newsletter format — the best way to stay informed about crypto asset market trends and topics.

Want to see how bitcoin and other digital assets fit into your portfolio?

Contact Us
Ready to sign up?
Create an Account