Ethena Team Members

Ethena team members have rich backgrounds and possess deep expertise and practical experience in fields such as Crypto, finance, and technology.

Author: 0xCousin

1. Who is behind Ethena?

Ethena team members have rich backgrounds and possess deep expertise and practical experience in fields such as Crypto, finance, and technology.

Founder G (Guy Young) used to work in a hedge fund with a market value of US$60 billion. After Luna went bankrupt, he founded Ethena; COO Elliot Parker was previously a product manager at Paradigm and also worked at Deribit; Jane Liu, head of institutional growth in Asia Pacific, has served as head of investment research at Fundamental Labs and head of institutional partnerships and fund relations at Lido Finance.

Ethena’s financing

According to Rootdata, Ethena has completed three rounds of financing, with a total financing amount of US$119.5 million. The lead investors include Dragonfly, Maelstrom Capital, and Brevan Howard Digital.

Ethena has attracted the attention and investment of many well-known investment institutions, which not only brought considerable funds to the development of Ethena, but also provided valuable industry resources for the business development of Ethena. Ethena's investment institutions include exchanges (YZi Labs, OKX Ventures, HTX Ventures, Kraken Ventures, Gemini Frontier Fund, Deribit, etc.), market makers (GSR, Wintermute, Galaxy Digital, Amber Group, etc.), and investment institutions with traditional financial backgrounds (Paypal Ventures, Franklin Templeton, F-Prime Capital, etc.).

2. What is Ethena?

In a nutshell, Ethena is a synthetic dollar protocol that has launched the US dollar stablecoin USDe and the US dollar savings asset sUSDe. The stability of USDe is supported by crypto assets and corresponding Delta neutral hedging (short futures) positions.

From the perspective of the project mission, Ethena aims to connect the funds in the three fields of CeFi, DeFi, and TradFi through the stablecoin USDe. At the same time, Ethena captures the interest rate differences of funds in these three fields (exchanges, on-chain, and traditional finance), thereby providing customers with more returns. If the scale of USDe grows large enough, it may also promote the convergence of capital and interest rates among DeFi, CeFi, and TradFi.

The mechanism of stablecoin USDe

Minting/Redemption Mechanism: Only two independent legal person minters (Ethena GmbH and Ethena BVI Limited) listed in the whitelist are eligible for minting and redemption of USDe. Minters need to use BTC/ETH/ETH LSTs/ USDT/USDC as collateral and interact with the USDe Mint and Redeem Contract. As shown below:

A recent USDe minting based on the Ethena protocol USDe Mint and Redeem Contract V2

At the time of minting/redemption, the pricing of Backing Assets is obtained and continuously verified by multiple different sources, including CeFi Exchange, DeFi Exchange, OTC Markets, and Oracles such as Pyth and RedStone to ensure that the pricing is correct and reasonable.

USDe stability maintenance mechanism: To ensure the stability of USDe, the key is to hedge the price fluctuations of Backing Assets. Ethena adopts an automated and programmed Delta neutral strategy.

sUSDe’s revenue sources

The income of sUSDe comes from Ethena's disposal of collateral.

When Ethena receives collateral, it can hold it as a stablecoin and earn a fixed deposit rate;

You can also entrust the selected CEX through a custodian, set up an airdrop futures position in the CEX to hedge the price fluctuations of the Backing Assets and earn funding rates at the same time;

If the Backing Assets spot is ETH, you can also do Staking and earn ETH Staking APR.

These earnings will be distributed to users in the form of returning more USDe when they cancel their pledged sUSDe and redeem USDe.

Uses of Stablecoins (USDe/sUSDe/iUSDe)

In the DeFi space:

In the CeFi space:

In the TradFi space:

3. Ethena’s Innovations

Delta neutral strategy hedges the price fluctuations of Backing Assets

Many stablecoin projects with Crypto Assets as Backing Assets eventually became insolvent and led to exchange rate decoupling. The key is that the price fluctuations of Backing Assets were not hedged. Ethena is the first project to use the Delta-Hedging algorithm and execution model to perform automated and programmatic Delta-neutral hedging on Backing Assets, making the Delta value of the portfolio close to 0. Although Ethena's Delta-Hedging algorithm and execution model were a black box in the early days, whether it can continue to achieve Delta-neutral results in the long term is a potential risk point, and this stability maintenance mechanism is an innovation. In the later stage, it may turn