$4M Dollar Win: Ethena Labs Secures Stablecoin USDe Treasury

Ethena Labs has recently gained $4 million for its treasury through their stablecoin project. This success was achieved primarily due to high yields derived from ether-future funding rates and staking ether to a validator.

The controversial concept behind Ethena Labs’ USDe, a synthetic dollar pegged to $1 through shorting ether futures, has divided the crypto market. However, the project has seen early signs of success with its treasury now standing at over $16 million, making it the third-largest revenue generator in the crypto market.

In less than two weeks since going live, Ethena has generated over 68% annualized yields on deposits as of Friday, allowing the project to keep $4 million for its treasury after paying out users. This has been confirmed by head of growth @MacroMate8 on X. These earnings have placed Ethena behind only Tron and Ethereum in terms of revenue generation.

The main contributor to Ethena’s high yields is the significantly high ether-future funding rates, along with staking ether to a validator, which currently yields less than 4% yearly. The funding rates refer to payouts made to traders who long or short an asset, depending on its price movement. For instance, longs pay shorts when prices go up, as they may borrow capital from the market to place larger bets and vice versa.

Users can deposit stablecoins, including tether (USDT), frax (FRAX), dai (DAI), Curve USD (crvUSD), and mkUSD, to receive the project’s USDe tokens, which can then be staked for additional yield. However, the unstaking process takes seven days. These staked tokens can also be supplied to other DeFi platforms to earn more yield.

According to DefiLlama data, the total value locked on Ethena has significantly increased from $300 million in mid-February to $833 million as of Friday, demonstrating the project’s rapid growth since its public launch.