Ethena (ENA) Can it shake up the hundred-billion stablecoin landscape? An in-depth analysis of the dual-token strategy

A New Challenger in the Stablecoin Market: Opportunities for Ethena in a $400B Market

The $400 billion stablecoin market is rapidly evolving. Traditional USDT and USDC have long dominated, but they face issues such as liquidity fragmentation and high cross-chain costs. In this blue ocean, Ethena (ENA) will launch in 2024, bringing a brand-new stable mechanism—building a fully crypto-native stablecoin ecosystem through Delta-neutral strategies.

According to the latest data, ENA is currently priced at $0.22, with a circulating market cap of $1.78B and a circulating supply of 7.958 billion tokens. Although it has fallen 5.51% in the past 24 hours, its $4.52M daily trading volume reflects ongoing market interest in this emerging protocol.

USDe vs USDtb: How One Protocol Serves Both DeFi and TradFi

Ethena’s core innovation lies in its dual stablecoin system. USDe is a fully crypto-native stablecoin operating within the crypto ecosystem, while USDtb is backed by tokenized U.S. Treasury bonds. This differentiated design breaks the traditional single-model approach of stablecoins.

USDe’s Technical Foundation: How Delta Hedging Maintains the $1 Peg

Unlike traditional models relying on fiat reserves, USDe employs Delta hedging as a price stabilization mechanism. Simply put, the protocol dynamically manages ETH and BTC derivatives positions to hedge against fluctuations in the underlying collateral assets. When ETH rises, short positions generate gains to offset appreciation; when ETH falls, long positions provide buffers. This dynamic balance allows USDe to maintain stability even during market volatility.

USDtb’s Differentiated Positioning: An Entry Point to Traditional Finance

In contrast, USDtb takes a completely different route—supported by real U.S. Treasury assets. This choice targets institutional investors and traditional finance participants, offering compliant and secure crypto-stable assets. Essentially, USDtb narrows the gap between DeFi and traditional finance, opening new application scenarios for stablecoins in TradFi.

Protocol Revenue and Market Adoption: The Power Behind $599.3M in Fees

By the end of 2023, Ethena had accumulated $599.3 million in fee revenue, demonstrating strong market recognition of its stablecoins. These revenues are reinvested into the protocol, strengthening system stability and sustainability.

Dual-Token Ecosystem: Incentive Design of USDe and sUSDe

In addition to the two stablecoins, Ethena has launched a staking token, sUSDe. Users can participate in protocol revenue sharing by staking sUSDe. This design not only incentivizes long-term holders but also ensures a decentralized governance foundation for the protocol.

Multi-layer Security Architecture Ensuring System Robustness

Regarding asset security, Ethena adopts multiple defenses: professional custodians manage assets, real-time risk monitoring systems are in place, and periodic audits are conducted by reputable third parties. This protective framework demonstrates the development team’s serious attitude toward user fund safety.

Real-world Challenges: Dilution Pressure and Market Cycles

It is worth noting that Ethena faces ongoing dilution and selling pressure from token unlocks. During cyclical fluctuations in the crypto market, this selling pressure could exert downward pressure on ENA’s price. Additionally, overall market environment changes will directly impact the adoption rate of stablecoins.

Ambitious Roadmap: Interoperability and Ecosystem Expansion

The protocol’s future plans are equally compelling. Ethena aims to launch Converge Chain to enhance interoperability, introduce more staking options, and achieve seamless integration with other DeFi protocols. These initiatives position Ethena as a continuously innovative protocol.

Team Background: Cross-disciplinary Professional Integration

The Ethena team comes from diverse backgrounds including derivatives trading, platform development, and risk management. This multidisciplinary experience provides a solid foundation for technological innovation and market competitiveness.

Outlook: The Next Decade of the Stablecoin Market

Ethena (ENA), through its innovative Delta-neutral strategies, dual asset support mechanisms, and comprehensive risk management, is reshaping the boundaries of stablecoins. From the fully crypto-native USDe to bridging traditional finance with USDtb, Ethena aims to carve out its own territory in the $400B stablecoin market. As the protocol continues to evolve, whether it can become a new leader in the stablecoin space remains to be seen.