[Crypto projects](https://revain.org/projects/) › Ethena

# Ethena (ENA): how it works, supply and reviews

## In short

- **Type**: Synthetic dollar protocol issuing USDe and the savings asset sUSDe
- **Issuance**: USDe is minted when a whitelisted user deposits assets (e.g. about 100 USDT for about 100 USDe) and burned on redemption; there is no fixed supply
- **Risks and caveats**: Funding risk: funding rates on the short hedges can turn negative, so the protocol may have to pay rather than earn.
- **Checked**: 31 October 2026

## Key facts

- **Ticker**: ENA
- **Official site**: [ethena.fi](https://ethena.fi/)

Key facts checked on 31 October 2026 against official sources.

## What is Ethena

Ethena is a synthetic dollar protocol that issues USDe, a dollar-denominated token backed by crypto and other assets hedged with short derivatives positions, and sUSDe, its staked reward-bearing form. USDe is not a fiat-backed stablecoin like USDC or USDT; ENA is the protocol's governance token.

## Network and consensus

| Parameter | Details |
|---|---|
| Type | Synthetic dollar protocol issuing USDe and the savings asset sUSDe |
| Peg mechanism | Delta-neutral: volatile backing assets are paired with short futures of about the same notional size |
| Minting | Only whitelisted users who pass KYC/AML can mint and redeem; US users cannot access the application |
| Custody | Backing is held with off-exchange settlement providers and delegated, not transferred, to derivatives exchanges |
| Runs on | Ethereum token contracts; ENA is also available on other chains through LayerZero |
| Launched | USDe launched in February 2024 |

## Supply and issuance

| Parameter | Details |
|---|---|
| Issuance | USDe is minted when a whitelisted user deposits assets (e.g. about 100 USDT for about 100 USDe) and burned on redemption; there is no fixed supply |
| Backing assets | Hedged spot crypto plus liquid stablecoins, DeFi and institutional lending, tokenised real-world assets and non-crypto basis trades |
| Rewards | Revenue comes from funding rates, lending and real-world asset returns; it funds sUSDe and partner reward programmes |
| Reserve Fund | A Reserve Fund absorbs periods of negative revenue; new revenue allocated to it is currently 0% |
| Mint fees | Ethena earns no profit from minting or redeeming USDe |

## What ENA is used for

- USDe: a synthetic dollar that can be staked into sUSDe to receive reward distributions
- ENA: voting on protocol parameters such as backing composition, revenue allocation and the Risk Committee
- sENA: staked ENA, with a cooldown before unstaking

## Who develops and governs Ethena

- **Governance**: ENA holders vote on the forum and on-chain; most decisions are delegated to committees
- **Off-chain design**: Ethena states that fully on-chain governance is not practical because of its off-chain infrastructure
- **Legal entity**: Ethena (BVI) Limited, per the general risk disclosure
- **Admin keys**: The protocol multisig needs 7 signatures; changes to core functions have 7-day time-locks
- **Origin**: Inspired by Arthur Hayes's March 2023 essay "Dust on Crust"

## History

| Date | Event |
|---|---|
| March 2023 | Arthur Hayes publishes "Dust on Crust", outlining a crypto-collateralised synthetic dollar. |
| 18 October 2023 | First smart contract audits (Quantstamp, Spearbit) are completed with no critical or high issues. |
| February 2024 | USDe launches. |

## Security and audits

- Ethena lists audits by Quantstamp, Spearbit, Pashov, Code4rena and Cyfrin; several report no critical or high issues.
- Gatekeepers can only disable minting and redeeming; they cannot re-enable them or take other actions.

## Security incidents

| Date | What happened | Source |
|---|---|---|
| 18 September 2024 | Hack: Ethena said its domain registrar account was compromised and it deactivated the website until further notice; it said the protocol was unaffected and funds were safe. Funds returned: not stated | [x.com](https://x.com/ethena/status/1836450334329155787) |

Further incidents are reported by third parties (press, incident databases) but are not confirmed in the company’s own channels, so they are not listed here.

## Official ENA contracts

| Network | Contract address |
|---|---|
| Ethereum (USDe) | [0x4c9edd5852cd905f086c759e8383e09bff1e68b3](https://etherscan.io/address/0x4c9edd5852cd905f086c759e8383e09bff1e68b3) |
| Ethereum (sUSDe) | [0x9d39a5de30e57443bff2a8307a4256c8797a3497](https://etherscan.io/address/0x9d39a5de30e57443bff2a8307a4256c8797a3497) |
| Ethereum (ENA) | [0x57e114B691Db790C35207b2e685D4A43181e6061](https://etherscan.io/address/0x57e114B691Db790C35207b2e685D4A43181e6061) |

Addresses from Ethena's Key Addresses page; other chains are listed there too.

## Risks and caveats

- Funding risk: funding rates on the short hedges can turn negative, so the protocol may have to pay rather than earn.
- Custodial risk: backing depends on off-exchange settlement providers being available and operating correctly.
- Exchange failure risk: hedges sit on centralised exchanges such as Binance, Bybit, Bitget, Deribit and OKX.
- sUSDe is not offered to persons resident or registered in the EU or EEA.

## Official links

- Website: [ethena.fi](https://ethena.fi/)
- Docs: [docs.ethena.fi](https://docs.ethena.fi/)
- Risks: [docs.ethena.fi/protocol-overview/risks](https://docs.ethena.fi/protocol-overview/risks)
- Audits: [docs.ethena.fi/resources/audits](https://docs.ethena.fi/resources/audits)
- Transparency dashboard: [app.ethena.fi/dashboards/transparency](https://app.ethena.fi/dashboards/transparency)
- Governance forum: [gov.ethenafoundation.com](https://gov.ethenafoundation.com/)

## Questions and answers

**What is Ethena USDe?**

USDe is a synthetic dollar issued by the Ethena protocol, backed by crypto and other assets hedged with short futures. Ethena says it is not the same as a fiat stablecoin like USDC or USDT.

**How does USDe keep its value?**

Volatile backing assets are paired with short futures of about the same size, so the combined position is delta-neutral; stable assets are held unhedged.

**What is ENA?**

ENA is Ethena's governance token, used to vote on backing composition, revenue allocation and the Risk Committee.

**Is USDe safe?**

Ethena discloses funding, custodial, exchange-failure and liquidation risks, and keeps a Reserve Fund to absorb negative revenue periods.

**Who can mint USDe?**

Only whitelisted addresses that pass KYC/AML checks; US users cannot access the application.

## Sources

- [Ethena Docs — Overview](https://docs.ethena.fi/)
- [Ethena Docs — How USDe works](https://docs.ethena.fi/overview/how-usde-works)
- [Ethena Docs — ENA](https://docs.ethena.fi/overview/ena)
- [Ethena Docs — Genesis story](https://docs.ethena.fi/overview/genesis-story)
- [Ethena Docs — Backing assets overview](https://docs.ethena.fi/backing-assets/overview)
- [Ethena Docs — Governance](https://docs.ethena.fi/protocol-overview/governance)
- [Ethena Docs — Reserve Fund](https://docs.ethena.fi/protocol-overview/reserve-fund)
- [Ethena Docs — Funding risk](https://docs.ethena.fi/protocol-overview/risks/funding-risk)
- [Ethena Docs — Custodial risk](https://docs.ethena.fi/protocol-overview/risks/custodial-risk)
- [Ethena Docs — Exchange failure risk](https://docs.ethena.fi/protocol-overview/risks/exchange-failure-risk)
- [Ethena Docs — Key trust assumptions](https://docs.ethena.fi/technical-design/key-trust-assumptions)
- [Ethena Docs — Staking USDe](https://docs.ethena.fi/technical-design/staking-usde)
- [Ethena Docs — Key addresses](https://docs.ethena.fi/technical-design/key-addresses)
- [Ethena Docs — Audits](https://docs.ethena.fi/resources/audits)
- [Ethena Docs — FAQ](https://docs.ethena.fi/resources/faq)
- [Ethena Docs — General risk disclosures](https://docs.ethena.fi/resources/general-risk-disclosures)
- [Ethena — Home](https://ethena.fi/)

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Page updated: 2026-10-31

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Source: https://revain.org/projects/ethena/