Ethena Labs, a synthetic stablecoin protocol, has recently integrated with centralized exchange wallets including Binance, Bybit, OKX, and Bitget. This integration allows users to earn a 20% reward boost by locking their USDe stablecoins for at least 7 days through exchange Web3 wallets. The rewards, known as “Ethena sats,” can be converted to the protocol’s native ENA token at the end of each campaign. To participate, users must deposit their Ethena USDe stablecoins into their exchange wallets, connect to the Ethena decentralized finance (DeFi) protocol, and stake their holdings.
The protocol currently has a total value locked of $2.274 billion and generates an annualized revenue of $178 million. Its ecosystem rewards have gained significant attention and usage. According to blockchain analytics firm Lookonchain, during Ethena Staking Season 2, the top ten wallets have withdrawn a total of 37.5 million ENA ($51 million) and staked them.
Ethena made headlines when it offered a 67% annual percentage yield (APY) on its USDe stablecoin shortly after its launch. It quickly became the highest-earning decentralized application in the crypto market. Currently, the protocol provides an APY of 24% on its stablecoins. This yield is not without risks as it relies on the trading income of complex Ethereum derivatives to fulfill its promised returns.
In response to concerns about its high yield, Guy Young, the founder of Ethena Labs, addressed comparisons to the failed Terra Luna stablecoin USTC. He stated that the criticisms were merely knee-jerk reactions and that Ethena’s yields were organic and sustainable. He emphasized that Ethena’s yields are publicly verifiable and are derived from various sources, including Ethereum consensus layer inflation rewards, execution fees, maximal extractable value fee captures, and trading income provided by Ethena Labs. The firm engages in opening short derivative positions when it receives long-position collateral assets to mint USDe stablecoins. The difference in value between these positions is paid out to USDe holders as yield.
million annualized revenue is nothing to scoff at. Ethena Labs is definitely doing something right.
I’ve seen too many scams in the crypto market.
Locking my funds seems like a restriction. 😒
I’m worried about the security of exchange wallets. 😰