Welcome to the fifth edition of stative.

After looking deeper into dEURO last time, I this time wanted to do the same for the Ethena ecosystem. Ethena - despite the general attention the stablecoin space is currently receiving - managed to get a spotlight.

Lets see what the buzz is about. And also what else is new.

Market overview

• Market cap remains almost unchanged to last edition, still hovering around all-time highs

• Trading volume took a HUGE jump, due to the craziness on the capital markets on Monday caused by the tariff wars

Interesting news

Man, there has been a lot going on recently in the stablecoin space - feels like we are on the verge of a monumental development here. Every week there more and more fundamental news and developments to follow. Here are a few highlights to note:

• US are leading the way with official stablecoin regulation: with the recently passed STABLE and GENIUS act they are setting a clear framework for making stablecoins officially legitimated and global, financial tools

• The second biggest stablecoin issuer Circle had officially filed for IPO (with their numbers raising a few questions marks) - only to now allegedly postpone everything. Officially due to the Trump tariff situation- but who knows, maybe they also didin’t really like the early feedback?

• Polarizing crypto “it-boy” Justin Sun of TRON has with an X-post about an alleged insolvency caused the FDUSD to depeg - feels like the wild west. Should people with his reach be held to act more responsible?

• Sumitomo Mitsui Banking Corporation (SMBC), Japan’s second-largest bank, is stepping into the world of digital currency by issuing their very own YEN-stablecoin in partnership with Ava Labs, the team behind the Avalanche Layer-1, and the popular custody and infrastructure player Fireblocks.

• Amongst other big CEX exchanges now also Binance comes through and delists the biggest stablecoin USDT and other non-compliant tokens like FDUSD, TUSD, USDP, DAI, AEUR, UST, USTC, and PAXG in order to comply with MiCA. It is important to note however, that European users can still hold USDT in perpetual contract.

• USDT issuer Tether continues to diversify its enormous earnings - after investments in bitcoin mining (ok), medtech (?!) and the global agricultural space (only weird at very first sight), they now acquired 30% of an Italian media company - more on their strategy behind that here.

Deep dive: Ethena - reinventing the stablecoin?

Ethena is a next-gen DeFi protocol built on Ethereum, aiming to create the first crypto-native, scalable, and yield-bearing stablecoin: USDe. Although Ethena Labs refrains from calling USDe a stablecoin. They are calling it “synthetic dollar”, not backed by fiat in a bank, but by on-chain crypto positions - an ambitious move that combines yield generation with stability.

The project has gained a ton of attention for its comparatively high yield promises from an “innovative stablecoin concept” and by that created flashbacks about the Terra / LUNA desaster of 2022.

Anyway, the USDe - Ethena’s USD synthetic dollar - has become the fourth biggest stablecoin by marketcap within just about 1 year after launching.

The Team & Ecosystem

Ethena is backed by leading crypto-native VCs (like Dragonfly, Binance Labs, and Arthur Hayes - a popular crypto figure and Co-Founder of Bitmex), and built by a team with deep experience in DeFi, derivatives, and smart contract engineering.

The ecosystem revolves around three core assets:

 • USDe – The synthetic dollar (the stablecoin)

 • sUSDe – A staked version that earns yield

 • ENA – The ecosystem’s native token, used for governance and potentially value capture (e.g. staking, fee distribution, etc.)

How USDe Works

Ethena applies a concept they are calling the “internet bond”. The Internet Bond is a type of digital bond operating on the Ethereum blockchain platform. The Internet Bond helps USDe maintain a stable price by staking Ethereum and using a two-way hedging strategy to keep the price at $1.

 • User deposits crypto (e.g. ETH or sETH) as collateral and receives USDe

 • Ethena opens short positions on CEXes to hedge the crypto volatility

 • When funding rates on these exchanges are positive, Ethena earns yield

This makes USDe a hybrid model: it’s crypto-collateralized + delta-neutral (hedged with derivatives). Think of it like DAI meets perpetual futures meets Lido.

How Ethena Makes Money

Ethena earns from funding rates on futures markets. It hedges ETH, and if markets pay to go long, Ethena earns. This yield is passed on to sUSDe holders as “interest”, while part of it is kept as protocol revenue. Think of it like staking a stablecoin — only powered by trading activity, not lending or fiat.

Recent Challenges

In February 2025, BaFin issued a warning about USDe potentially being an unauthorized e-money product in Germany. While not a direct ban, this shows growing regulatory interest in stablecoin models that promise both stability and yield — especially when they’re not fiat-backed. Ethena has made clear they believe they are being compliant and are trying to resolve the issue.

Risks & Limitations

 • If funding rates flip negative, yield dries up or turns into losses

 • Exchange dependency (CEX risk, counterparty risk)

 • Requires liquidity and deep markets to hedge effectively

 • Stability isn’t 100% guaranteed — especially under stress

 • Regulatory scrutiny around “not-a-bank but acts like one” models

Outlook

Ethena has quickly become one of the most-watched projects in DeFi, and demonstrated poster execution and fasst growth. But with increasing regulatory attention and market risk, its long-term success will depend on how well it can balance yield, scalability, and compliance - all while educating the world (and especially regulators) on what a “synthetic dollar” really means.

I, for one, am very curious to and excited to experience the selection process on which stablecoin concepts are sustainable and if / which ones will manage to establish themselves to become the golden standard. If I were to guess today, I’d say “synthetic dollar” will not be the one.

What do you think?

Thanks for reading in 🤍

// Kai