Cryptocurrency Information Bureau | Currency Introduction: What is the secret behind the high interest rates? A thorough explanation of Ethena's sUSDe! Check the risks, returns, and future potential to learn about a new form of profit! #sUSDe #Ethena #Staking
Video explanation
What is Ethena Staked USDe (sUSDe)? A beginner's guide! A look into the future of digital savings
Hello, I'm John, a cryptocurrency blogger. Today, I would like to explain the new cryptocurrency "Ethena Staked USDe", or "sUSDe" for short, which has been attracting a lot of attention recently, in an easy-to-understand way even for those who are new to cryptocurrencies. You may feel that it is difficult to understand, but don't worry! Let's take a look at it together. It may be easier to understand if you think of sUSDe as something like a "high-interest US dollar-denominated deposit account on the Internet" with a new "profit-generating mechanism" that is a little different from previous cryptocurrencies.
Ethena Staked USDe (sUSDe) Basics: What is it?
First, to understand sUSDe, you need to know about its parent, USDe.
- What is USDe?: USDe is a "synthetic dollar" developed by a team called Ethena Labs. It is a special cryptocurrency (a so-called stablecoin) whose price is designed to always be approximately equal to 1 US Dollar (USD). However, unlike traditional stablecoins that are backed by actual US dollars in bank accounts, USDe uses a combination of advanced financial strategies (such as derivatives trading) and crypto assets to maintain its value. It can be said to be Ethena's flagship product.
- What is sUSDe?: sUSDe is short for "Staked USDe" and is a cryptocurrency that you can obtain by "staking" (depositing) the USDe you hold in the Ethena protocol (system and rules). When you stake USDe, you receive sUSDe in return, and you also receive a share of the revenue generated by the Ethena protocol. In other words, just by holding sUSDe, there is a possibility that your USDe will increase. In an OSL article, it is described as "an on-chain cryptocurrency-native savings account."
The problem sUSDe is trying to solve
Traditional bank deposits currently offer very low interest rates, but in the crypto world there are opportunities to earn higher returns through DeFi (decentralized finance), but this comes with risks and complexities.
Ethena, USDe, and sUSDe aim to provide more attractive yields than traditional financial market (TradFi) interest rates while maintaining the stability of being pegged to the US dollar. In particular, they are unique in that they take advantage of the volatility of the cryptocurrency market while adopting a mechanism to reduce the risk of price fluctuations (delta-neutral hedging strategy).
Unique features of sUSDe
- ProfitabilityStaking gives you access to the Ethena protocol's revenue share, which is primarily based on the funding rate from the derivatives market and revenue generated from hedging transactions to offset price volatility.
- transparencyEthena aims to provide information about its reserves and operations on-chain (publicly available on the blockchain) and strives for highly transparent operations.
- Accessibility: USDe and sUSDe are issued on the Ethereum blockchain and have recently been deployed on other blockchains, such as BNB Chain and the TON blockchain (linked to the messaging app Telegram). This makes them more accessible to a wider audience. The link with Telegram in particular has the potential to provide USDe-based savings vehicles to over 9 million users, according to articles such as The Defiant.
- Dispersed: It aims to be independent of a centralized authority and to be operated based on smart contracts (programmed agreements).
Supply: How does it affect prices?
When considering the price of a cryptocurrency, its "supply" is a very important factor. The concept of the maximum supply of sUSDe itself is a bit special because it depends on the amount of staking of USDe.
- USDe Supply: USDe is issued against a user's deposit of a specific cryptocurrency (e.g. ETH or liquid staking tokens) as collateral, with supply fluctuating according to market demand.
- sUSDe Supply: sUSDe is issued according to the amount of USDe users deposit into the Ethena staking contract. This means that as more people stake USDe, the supply of sUSDe increases, and as more people withdraw (unstake) USDe, the supply of sUSDe decreases. There is usually a 7-day waiting period for unstaking.
Why does supply matter to price?
Generally, things with limited supply tend to have scarcity value, and as demand increases, prices tend to rise. In the case of sUSDe, its value is linked to USDe, and the amount of USDe increases through staking rewards. Therefore, rather than the "price" of sUSDe, it is important to consider "how much USDe (i.e. the value of US dollars) the sUSDe you hold will be in the future." If the Ethena protocol continues to generate stable and high profits, the actual return for sUSDe holders may also be large.
Technical mechanism: Blockchain and special technology
Behind sUSDe and USDe is cutting-edge blockchain technology and unique financial engineering.
Blockchain Platform
USDe and sUSDe are tokens issued primarily on the Ethereum blockchain. Ethereum has smart contract functionality and is widely used as the basis for DeFi (decentralized finance) projects. This allows transactions and staking to be conducted in a highly transparent and verifiable manner.
Recently, in order to expand the number of users and reduce fees, it has been deployed on the BNB Chain and TON blockchain (Telegram Open Network). In particular, it has been integrated into the TON blockchain under the name "tsUSDe" and is available in Telegram wallets, attracting attention (Cointelegraph, FXLeaders).
USDe Value Stabilization Mechanism: "Delta Neutral" Strategy
The core technique for USDe to maintain its 1:1 peg to the US Dollar is a hedging strategy called “delta neutral.” This is a bit technical, but in simple terms it goes like this:
- Ethena holds cryptocurrencies such as ETH (Ethereum) deposited by users (this is called a spot long position).
- At the same time, you take a short position on a derivatives exchange (a place where financial derivatives of virtual currencies are traded) for the same amount of cryptocurrency.
This will offset the risk of value fluctuations, whether the price of the collateral asset rises or falls, and stabilize the value of USDe. And the "funding rate" (a fee paid between long and short depending on market conditions) generated in the process of this strategy is one of the sources of USDe's yield. According to Nansen.ai's explanation, USDe maintains the peg with a different approach than traditional fiat-collateralized stablecoins.
sUSDe Staking and Rewards
When users deposit (stake) USDe into Ethena's staking pool, sUSDe tokens are issued as proof. The staked USDe is used to generate revenue for the Ethena protocol, and the profits (funding rate income and other revenues) are distributed to sUSDe holders. This distribution is often realized in the form of an effective increase in the value of sUSDe over time (the amount of USDe held increases). According to OSL.com, staking is a way to earn passive rewards while supporting the security of the blockchain network.
Team and community: reliability and activity
The Ethena project is driven by Ethena Labs. The team members are said to include experts with experience in both traditional finance and the cryptocurrency industry. The transparency and track record of the team are important factors in assessing the reliability of a project.
Team credibility
- Disclosure of InformationEthena has published information about the project's structure and design philosophy on its official website and in documents. It has also announced that it has raised funds from major venture capital firms (as reported on Clay.com), which shows that there are high expectations for the project.
- audit: Smart contract security audits are very important for DeFi protocols. Ethena has also been reported to have been audited by multiple security companies, but it is recommended that you check the latest audit report yourself before using it.
Community Activity
Ethena has a community on platforms such as X (formerly Twitter) and Discord, where project updates and discussions are actively taking place. The size of the community and the enthusiasm of the participants can be one of the indicators of the future potential of the project.
Other useful ways to gauge the health of a project include whether there is active feedback from users and developers and whether the management team responds to it sincerely.
Use cases and future prospects: payments, DeFi, and more
sUSDe and its underlying USDe are expected to be used in a variety of areas, not just as a means of earning yield.
Primary use cases
- Preserving value and earning yield: Due to the stability of the US dollar peg and the relatively high yield, it can be used as a means of inflation hedging and asset management. It is expected to play a role as a "cryptocurrency native savings account" (see OSL article).
- Use in DeFi: USDe may be used as collateral or liquidity pair in other DeFi protocols (lending, DEX, etc.) sUSDe may also be used in DeFi as a yield-bearing asset.
- Payment Methods：Especially with the integration with Telegram (The Defiant, Cointelegraph), USDe could become a popular way to make payments and transfers within messaging apps, reaching a user base of hundreds of millions of people.
- Collaboration with TradFi (traditional finance)According to an article in The Defiant, Ethena also plans to incorporate sUSDe yields into traditional bond markets and financial products, potentially serving as a bridge between cryptocurrencies and traditional finance.
Future prospects
Ethena's roadmap reportedly includes expanding into further blockchains, adding new collateral assets, and developing services for institutional investors. In particular, the 2025 roadmap highlights deepening integration with TON, bringing USDe to Telegram's 9 million users, and expanding into TradFi (reported by The Defiant).
If Ethena can maintain its delta-neutral strategy, continue to offer high yields, and overcome regulatory obstacles, USDe and sUSDe could become a major player in the stablecoin and DeFi markets. An article by Sperax.io lists Ethena Staked USDe as one of the yield-bearing stablecoins to watch in 2025.
Comparison with competitors: sUSDe’s strengths
There are other stablecoins and staking services that offer yield, so let’s look at how sUSDe (and USDe) differs from them and compare their key strengths.
| Features | Ethena sUSDe | Staking of popular fiat-collateralized stablecoins (e.g. USDC, USDT) | Staking algorithmic stablecoins (past examples) |
|---|---|---|---|
| Underlying Assets | Crypto Assets and Derivatives Positions (Delta Neutral) | Primarily fiat currency (such as the US dollar) | The protocol’s governance token and algorithmic balancing with other cryptocurrencies |
| Source of yield | Funding rate, basis spread (price difference between futures and spot) | Primarily interest rates from the lending market | Protocol inflation rewards, transaction fees, etc. (even if sustainability is an issue) |
| Peg Stability Mechanism | Delta Neutral Hedging Strategy | Directly backed by fiat reserves | Supply adjustment by algorithm (there have been cases of bankruptcy in the past) |
| Strengths of sUSDe |
|
|
|
| Points to consider |
|
|
|
Ethena's USDe is sometimes referred to as a "synthetic dollar" or "algorithmic stablecoin" in articles by Nansen.ai and The Defiant, but its mechanism differs from conventional algorithmic stablecoins in that it aims to back its value and generate yields by combining real assets (such as ETH) with derivatives. This is unique and a strength, but at the same time, it is important to understand that it also contains new types of risks.
Risks and Precautions: For safe use
While sUSDe and USDe may offer attractive returns, there are risks involved in investing in and using them, the following points of which should be fully understood:
- Smart Contract Risk: Ethena’s system runs on smart contracts (programmed contracts). If there is a bug or vulnerability in the program, assets may be lost. Make sure it is audited by a trusted source.
- Risks of a Delta Neutral Strategy: This strategy is complex and not perfect.
- Counterparty Risk: The risk that an exchange that handles derivatives transactions will go bankrupt.
- Funding Rate Risk: If the funding rate becomes significantly negative and continues for an extended period of time, it may result in a decline in yield and/or an impact on principal.
- Liquidation Risk: The risk that hedge positions will be liquidated in the event of extreme market price fluctuations.
- Basis Risk: The risk that the gap between spot prices and futures prices will widen unexpectedly.
- Risk of deviation from peg: USDe is designed to be pegged to $1, but there is a risk that its price may temporarily or permanently depeg from $1 under extreme market conditions.
- Regulatory Risk: Regulations on stable coins and DeFi in each country are still in the process of development. There is a possibility that the operation of Ethena and the use of USDe/sUSDe will be legally restricted in the future. In particular, it has been pointed out that the US may see major changes in cryptocurrency-related policies leading up to 2025 (see Genfinity.io article).
- General cryptocurrency price fluctuation risk: While sUSDe itself is pegged to the USDe (US Dollar), price fluctuations in the collateral assets on which the Ethena protocol relies (such as ETH) may indirectly affect it.
- Scams and phishingBeware of scam sites and fake social media accounts pretending to be popular projects. Always visit official sites.
It is a financial principle that "high yields come with high risks." When using sUSDe, it is wise to fully understand these risks and only use funds that you can afford to lose without affecting your lifestyle.
Expert opinions and analysis (based on reliable sources)
Ethena and USDe/sUSDe have been attracting attention and analysis from many cryptocurrency analysts and researchers. The following points are generally being discussed:
- Yield sustainability: The funding rate, which is the source of the yield offered by Ethena, fluctuates greatly depending on the market environment. Experts are paying attention to whether it can continue to provide a stable and high yield over the long term. In a post by Binance Square, an example was shown of an annualized return of 30% on average over the past 4.47 days, but this is always subject to change.
- Risk Management System: While the delta-neutral strategy is attractive in theory, its implementation in practice poses many challenges. Ethena's risk management framework, particularly its exchange selection, liquidity provision and emergency response measures, are being rigorously evaluated.
- Progress in transparency and decentralization：Ethena aims to be a decentralized “internet bond”, but at present there are still some parts that are highly dependent on the development team. It will be interesting to see how far it can move towards a truly decentralized protocol in the future.
- Competitive advantage over competitorsExperts continue to analyze whether the value proposition offered by Ethena is sustainable compared to other yield-bearing stablecoins and DeFi protocols.
- Compliance with regulations: How Ethena adapts to the trend of strengthening regulations on stablecoins around the world is a crucial point in determining its future prospects.
Many analysts have praised Ethena for its innovative approach, but cautioned that it is new and has unknown risks and whether it can survive market stress tests. For the latest information and detailed analysis, we recommend referring to specialized media such as Nansen.ai, The Defiant, and Cointelegraph, as well as Ethena's official documentation.
Latest News and Roadmap Highlights
Ethena is a relatively new project and is actively under development and expansion. Recent news and roadmap highlights include:
- Partnership with TON Blockchain (April-May 2025)：Ethena has signed a strategic partnership with the TON Foundation to deploy USDe natively on the TON blockchain. sUSDe will also be integrated into the TON ecosystem as "tsUSDe" and made available to Telegram users. This is expected to provide access to Telegram's vast user base of over 9 million monthly active users (Cointelegraph, The Defiant, blog.ton.org, FXLeaders reports). The CCN.com article also mentions the possibility that tsUSDe could offer a 10% APY (annual interest rate) through Telegram wallets.
- Deployment to BNB Chain (April 2025): USDe and sUSDe are now available on BNB Chain, making major DeFi protocols on BNB Chain more accessible and providing more choice for users (CryptoNinjas reports).
- 2025 Roadmap Announcement (May 2025): Ethena has announced its 2025 roadmap, which includes plans to integrate sUSDe yields into the TradFi bond market and strengthen its functionality as a payment tool for Telegram users. Following this announcement, the price of its governance token, ENA, has reportedly risen (The Defiant).
- Providing continuous yieldEthena has reportedly continued to provide users with attractive yields, which fluctuate with market conditions, but it is important to note that these are not guaranteed and are subject to change.
- Introducing governance token ENAThe governance token "ENA" was introduced to allow the community to participate in decision-making about the future direction of the Ethena protocol through voting and other means, and was also airdropped (distributed free of charge).
These moves indicate that Ethena is actively expanding its ecosystem and trying to deliver its value to more users. We look forward to seeing future announcements.
FAQ: Frequently Asked Questions
- Q1: Is sUSDe secure?
- A1: sUSDe involves smart contract risk, risks associated with the delta neutral strategy (counterparty risk, market risk, etc.), peg deviation risk, regulatory risk, etc. The Ethena team has taken measures to mitigate these risks, but they do not eliminate them. It is essential that you do your own research and understand the risks before investing.
- Q2: What is the difference between USDe and sUSDe?
- A2: USDe is a synthetic dollar pegged to the US dollar issued by Ethena. sUSDe is a yield-bearing token that can be earned by staking USDe in the Ethena protocol. By holding sUSDe, you can receive a share of the revenue generated by the Ethena protocol. In the words of OSL.com, sUSDe is like a "cryptocurrency-native savings account."
- Q3: How can I get sUSDe?
- A3: First, you need to obtain USDe. USDe can be obtained by issuing it on the Ethena official website or a compatible decentralized exchange (DEX) by collateralizing cryptocurrencies such as ETH, or by exchanging it for other cryptocurrencies. After that, you can receive sUSDe by staking USDe on the Ethena platform. According to an article on Cryptopotato, Ethena mainly supports staking with USDe.
- Q4: Is the yield on sUSDe fixed?
- A4: No, it is not fixed. sUSDe yields fluctuate depending on market conditions, mainly the funding rate of the derivatives market. Therefore, high yields are not always guaranteed. Please understand that past performance is no guarantee of future performance.
- Q5: On which blockchains can USDe and sUSDe be used?
- A5: It is mainly issued and used on the Ethereum blockchain, but recently it has also been deployed on the BNB Chain and TON blockchains (CryptoNinjas, Cointelegraph). It may become compatible with more blockchains in the future.
- Q6: What is the ENA token?
- A6: ENA is the governance token of the Ethena protocol. ENA holders can vote on proposals for future updates and operational policies of the protocol.
Summary and Caution
Ethena Staked USDe (sUSDe) is an innovative mechanism that aims to achieve the stability of the US dollar peg while pursuing higher yields than traditional financial products. There are particularly high expectations for yield generation using a delta-neutral strategy and mass adoption through collaboration with Telegram.
However, new technologies and mechanisms also entail unknown risks. Various factors may affect them, such as vulnerabilities in smart contracts, extreme market fluctuations, and regulatory changes. When investing in or using sUSDe or USDe, be sure to thoroughly research the project yourself (DYOR – Do Your Own Research), fully understand the risks, and make your decision at your own risk.
I hope this article helps you to better understand sUSDe. The world of cryptocurrencies is constantly evolving, so it's important to keep up with the latest information!
Related links collection
- Ethena official website (Check here for the latest information)
- OSL Academy: What is Ethena Staked USDe (sUSDe)?
- NFTevening: Ethena Deep Dive: Understand USDe and ENA token
- The Defiant (Lots of Ethena-related news)
- Nansen.ai: What is Ethena? A Comprehensive Guide
- Cointelegraph (Ethena, TON related news)
Disclaimer: This article is for informational purposes only and does not recommend investing in any specific financial product. Investing in cryptocurrencies carries a high degree of risk. Any investment decisions are at your own risk.