Ethena

Definition ∞ Ethena is a synthetic dollar protocol built on Ethereum, offering a crypto-native solution for a stable currency independent of traditional banking infrastructure. It generates a stablecoin, USDe, which maintains its peg through a delta-hedging strategy involving staked Ethereum and short perpetual futures positions. This mechanism aims to provide a scalable and censorship-resistant digital dollar. Ethena also provides an internet bond, offering yield from its operations.
Context ∞ Ethena’s USDe stablecoin and its yield-generating “internet bond” are a current focus in decentralized finance news due to their unique synthetic approach. Discussions often center on the sustainability of its yield, the risks associated with its delta-hedging strategy, and its potential impact on broader crypto markets. Regulators and analysts are closely observing Ethena’s model for systemic implications and stability.