Etena (ENA) also holds stablecoins like USDC as reserves for safety. So with dollar hegemony. It adds strength to the U.S.-led economic order.

Etena is the most high-profile crypto-native asset since Terra. It provides virtual asset-based money solutions without relying on traditional banking system infrastructure.

Etena (CRYPTO: AAVE) is the most high-profile crypto-native asset since Terra. It provides virtual asset-based money solutions without relying on traditional banking system infrastructure.

However, such a system is likely to be suspected of violating the dollar issuance power monopolized by the U.S. Federal Reserve (Fed). This is because it's like a private company printing dollars.

"Ethena undoubtedly contributes to broadening the reach of the U.S. dollar and strengthening its dominance," said Guy Young, founder of Etena, who was recently interviewed in Mail Business.

'Cryptographic proof instead of trust'

Satoshi Nakamoto, the founder of Bitcoin, cited it as a necessary element to implement decentralized finance in the introduction of the Bitcoin white paper.

It wanted to implement reliable and unreliable finance through mathematical logic recognized by everyone, not financial institutions such as banks and securities companies, and codes based on it.

In that sense, stablecoins, which have recently grown rapidly, are heretical. It doesn't match Satoshi's philosophy at all.

Take Tether (USDT) as an example and we should believe Tether is on British Virgin Island issuing USDT. If Tether goes bankrupt, Tether's value will also collapse.

Therefore, it is a dream of all participants in the virtual asset market to create stablecoins that move entirely based on cryptocurrency rather than based on real dollars like Tether and USDC.

Of course, Terra, the most famous in this field, collapsed through the Terra/Luna incident, leaving a big wound. However, various projects are still trying to create crypto-native stablecoins.

Etena is a project that has attracted the most attention in recent years in this field.

Etena's stablecoin USDe ranks third behind Tether and USDC with a market capitalization of $5.45 billion.

According to Depyramar, Etana's deposit asset (TVL) was $5.673 billion as of the 10th, more than 10 times higher than $851 million a year earlier.

Etena accounted for more than 85% of the on-chain dollar asset growth last year as decentralized finance (DeFi) became the pillar of growth, founder Young said. "More than 50% of Pendle's TVL is due to Etena, and about 25% or more than $100 million of Sky's revenue is due to Etena."

This is due to high interest rates. As of last year, the average annual rate of sUSDe was 18%. In other words, if you deposit USDe, a stable coin, you will get an annual rate of 18% without risk.

"Etena provided the highest annual rate in the DeFi industry," said founder Young. "Both ordinary investors and various DeFi projects chose Etena to increase capital efficiency."

Etena's stablecoin USDe works in a unique way. If Ethena receives one Ethereum deposit, it will take a position to bet on the Ethereum's decline as much as one Ethereum.

This increases the price of the deposited spot Ethereum and loses the short position. Since both are 1 Ethereum, the gain or loss is +-0.

Existing stablecoins have been troubled by the decline in the nominal value of collateral unless they entrust dollars and obtain dollar stablecoins.

In other words, Etena has hedged this risk. A strategy that minimizes the change in the value of a position due to changes in the price of an underlying asset is called delta neutrality.

Etena can also earn income in this way. The virtual asset market is dominated by unique derivatives called indefinite futures.

Futures options on the stock market are basically in contrast to those that are due. Futures options in the existing stock market match the prices of spot and futures because they buy in-kind at maturity and perform futures contracts.

However, it does not do indefinite gifts, and to solve this, there is a concept of funding costs.

In general, when a position is focused on either a long or a short, investors in high-ratio positions periodically pay the opposite position.

The virtual asset market is generally paid for funding when it is in a short position unless it is a long-term downtrend, which also earns funding through the position USDe took for delta-neutrality.

Of course, Etena recently launched "USDtb" in case such a strategy becomes impossible due to a long-term downtrend. USDtb is based on the BlackRock Tokenized Government Bond Fund BUIDL (BlackRock USD Institutional Digital Liquidity Fund).

"The introduction of stablecoins as a supportive asset for USDe relieves pressure on protocols when markets fall, while also improving financing," Young said.

The problem is that such a structure is sitting at an inevitable risk.

Etena should use the Centralized Exchange (CEX),