DeFi Platform Earning Yield by Shorting Ether Attracts $300 mn
Decentralized finance platform Ethena has seen significant inflows since its launch, despite criticism over its model for generating an annualized 27% yield to holders of its USDe tokens.
Over $287 million of USDe tokens have been minted, with over $50 million coming after the platform went live to the public. The 27% reward is calculated on a seven-day rolling basis and may change each week based on underlying factors.
Users can deposit stablecoins like tether, frax, dai, Curve USD, and mkUSD to receive Ethena’s USDe, which can then be staked. Unstaking takes seven days, and staked USDe tokens can be supplied to other DeFi platforms for an additional yield.
Ethena calls USDe a synthetic dollar, mimicking an algorithmic stablecoin with a target peg of $1. The yield is generated from two sources: staking ether to a validator and earning 5% on the capital, and shorting ether futures to capture the funding rate, which is estimated to be above 20%.
(With inputs from Shikha Singh)
You need to login in order to Like
