Ethena USDe

USDe inherits its nominal value from the assets used in its minting process. The protocol takes measures to offset the delta in the denominated asset, such as opening short perpetuals, to make the position delta-neutral.

Thus, USDe's primary offering is maintaining the stable peg despite market volatility, which causes the value of the backing asset (BTC, SOL, ETH, or stablecoins) to fluctuate.

It represents the yield-generating nature of the USDe.

To access the yield, USDe must be transformed into sUSDe, the yield-bearing form, through staking. This form retains transferability and can therefore be traded.

The risk exposure origin of value is recognized since the unlocking process has a seven-day cooldown period. After a user requests a withdrawal, their USDe are placed in a dedicated smart contract from which they can be withdrawn after the cooldown period.

In its staked form (sUSDe), USDe earns yield. The rewards are sourced from protocol revenue derived from:

• Liquid stablecoin APY
• basis spread from delta-hedging positions that are automatically opened at the time of minting USDe
• ETH staking rewards.

The Reserve Fund protects users from negative cashflow (e.g., when the basis spread becomes greatly negative).