Central Stablecoins such as USDC and USDT maintains their value by maintaining FIAT reserves, but they come with the risk of guarding and relying on traditional financial institutions. On the other hand, the decentralized Stablecoins aims to avoid these dependencies, but it often struggles with expansion and liquidity and maintaining price stability.
ETHENA (ENA) introduces a new solution with USDE, which is an artificial dollar specifically designed for decentralized financing space (Defi). Unlike traditional stablecoins, USDE does not depend on FIAT reserves, instead using encryption mechanisms to maintain stability while resisting control remains.
What is ENA?
Ethina is a new approach to Stablecoins in Defi. It provides artificial dollars – known as USDE – designed for stability without relying on traditional FIAT reserves.
ETHENA reinforces Blockchain Proof of ETHEREUM (POS) and aims to handle restrictions in current Stablecoin models by providing control -backed Stablecoin, supported by cryptocurrencies.
How does Etheina work?
Ethena uses a mixture of financial strategies and Blockchain incentives to maintain the stability of the US dollar while providing opportunities to generate the return on users.
Delta hedge for stability
One of Ethaina’s basic mechanisms is the hedge of Delta, a strategy for managing the risks used to counter fluctuations in the value of the basic coding assets.
The hedge includes the Delta Settings on ETHEREUM derivatives via third -party platforms. This balances exposure to risks, ensuring that even if the value of the side encryption remains, USDE remains stable.
In short, the hedge is similar to a Delta having a backup plan to protect from price movements. Here is how it works in simple phrases:
- Imagine that you get the value of its value originally when the ETHEREUM price (ETH) rises.
- To compensate for potential losses if ETH decreases, you take a short position (the Betting ETH) will decrease on the derivative platform.
- If the value of the ETH decreases, then your short positions, and balance between the loss. If ETH rises, the short position loses the value, but its original value increases.
By constantly adjusting these positions, Ethena maintains a stable USDE value, while maintaining their connection near one USD. However, the hedge of the Delta is not free of risk:
- Repeated re -balance re -transactions, which affects the total returns.
- Market conditions can turn quickly, and require continuous monitoring.
- There is no completely fortified system against volatility, which means that additional risk management strategies are necessary.
Connecting and generating generation
ETHENA also mechanisms to beautify production and beauty to stimulate the user’s participation and ensure the sustainability of the protocol.
The return model depends on two basic sources:
- Ethereum Stokeing-Ethereum Stocking Bonuses.
- Derivative-based financing-revenues are generated through the hedge process, while capturing financing rates from derivative functions.
Usde holders can share their symbols within the Ethaina Protocol to earn bonuses. This evaluation process serves multiple purposes, such as encouraging long -term participation and enhancing the stability of the ecosystem.
It also provides an opportunity for negative income, allowing users to win the return from protocol operations. Moreover, the protocol distributes some of the bonuses created for users, and harmonizing the incentives within the ecosystem.
What is USDE and how it works?
As we mentioned, USDE is the “artificial dollar”-one of the assets with a dollar-backed dollar guarantee instead of traditional banking reserves.
How does Etheina generate the return in favor of USDE?
Ethena provides a transparent way for users to gain the return on USDE holdings, which helps to make it a more attractive option in Defi space. Here is how you can do that:
- Earning and gain with SusDE:
You can share your USDE and receive an asset called SusDE in return. This represents your share in the Ethina Stank collection. With the growth of the pool, as well as the value of SusDE, you can exchange it to Stablecoin whenever you decide to withdraw. This continuous preparation has constantly provided returns more than 10 % annually, allowing you to gain your stable assets.
- Profit from market mechanics:
Ethena also generates returns by exploiting financing rates in permanent futures markets. In this market, long positions usually pay short jobs, which means that the protocol can benefit from these payments. This process and wandering ETH of the rewards add to your total return as a USDe holder.
Benefits of using USDE
We can highlight the benefits of USDE as follows:
- Opply accessories: with USDE, you can share your assets and earn a stable return that remains above 10 % annually. This provides an attractive and reliable income stream for users of the Defi ecosystem.
- Expansion to meet the demand: ETHENA is designed to expand based on the demand for USDE. Using the main encryption markets to support the original, the protocol can quickly increase as needed. The plans are the use of the deep liquidity of Bitcoin to increase the capacity more. This means that Stablecoin can adapt more easily to the changing market needs.
- Censorship structure: USDE avoids the risks associated with traditional financial institutions. It is backed by encryption assets instead of the money you keep in banks. Assets are managed through a trustee guardian, providing a more central and flexible system.
USDE opposite Terra’s Ust: Main Differences
Usde and Terra’s UST sought to maintain a stable value, but approach it differently. Terra’s UST used a dual symbolic system, depending on the distinctive symbol of his partner, Luna, to maintain a stable UST value. This method only worked as long as the Luna Tokeen price is fixed. When the color of Luna decreased sharply, UST also crashed.
According to Ethina, USDE is supported directly with assets like Bitcoin (BTC) and ETHER (ETH) through short sites on these assets.
This support 1: 1 means that for every US dollar in blood circulation, an equal amount of encryption guarantees is kept. Stablecoin’s approach reduces the risk of low sudden value, as it does not depend on the distinctive code price associated (as UST).
Possible risks with USDE
Although USDE is designed to provide stability, its value depends on the dynamics of the encryption market and the availability of future hedges. Maintaining its stable value in the very volatile markets may become more challenging, especially if the encrypted side faces sharp price declines.
Therefore, for the sake of completion, USDE has yet provided a different type of stablecoin, designed taking into account the no -considering principles and support for encryption assets instead of FIAT.
Ena Code: Distinguished Code and Interest
Ena is the distinctive symbol of the governance and interest of Ethina. It supports the decentralized ecosystem of the platform by enabling decision -making, encouraging participation, and promoting participation.
Judgment and influence
As a symbol of the Ethaina administration, Ena enables voting rights holders to influence the development of the protocol. Participants can vote on vital decisions, such as:
- Determine risk management instructions
- Choose asset works to support USDE
- Approval of partnerships or integration
This structure guarantees that society has a share in the direction of Ethina and long -term sustainability.
Ena’s use cases
Ena design stimulates the active participation in the ecosystem, such as:
- Staking Bonuses: Ena Stakers receive bonuses, and strengthen the Holding in the long run.
- Save liquidity: holders of additional incentives can be gained by saving liquidity, especially in PT -NNA, on platforms such as Pendle Finance.
- Series Security: ENA’s convenience is enhanced by the series for the USDE transmission via the Layerzero DVN network.
Ena is available on major central stock exchanges such as Binance, Kucoin and Bybit and decentralized options such as UISWAP.
Distinguished symbol and blood circulation
The total offer from Ena is 15 billion icons, with distribution as follows:
- 30 % for the development of the ecological system
- 20 % for investors
- 15 % for Ethaina
- 30 % for the main shareholders
Ena Airyrop
In April 2024, Ethina distributed 5 % of its original symbols in Ena to the participants in the early shareholders campaign, which enhances participation within its ecological system. The shads campaign strengthened liquidity and early incentive adoption, and the creation of Ena gatherings on platforms such as Curve and Pendle Finance.
The project in its third season, which will last for six months and end on March 23, 2025.
Related questions
How does ESDE keep the dollar in US dollars?
Ethena usde maintains its connection to US dollars through the neutral hedging of the Delta, which is a technique of risk management that compensates for the risk of support assets.
Instead of relying on traditional fate guarantees, the protocol takes short permanent future sites equivalent to the value of its property. This strategy neutralizes price fluctuations, allowing the American state to stay stable without direct FIAT reserves.
What are the use of ethena usde?
Usde has multiple use cases. It can be a bonus or recover to manage liquidity and calm them to earn rewards. In addition, it works as a way to exchange in Defi applications, including lending, trading and payments. Traders can also use it for cash and carry trades, and exploit the differences between instant prices and futures for revenue.
How does Ethena Usde differ from traditional stablecoins like USDC or Tether?
Usde supports original encrypted mechanisms such as the Delta hedge and a nursery on the chain. This design makes more developmental and controlled but also provides various risks, especially those related to the fluctuations of the encryption market and derivative -based stability mechanisms.
