Ethena Expands USDe to Equity Perpetuals as It Seeks a New Growth Engine

Ethena targets higher yields in equity futures to revive USDe

Ethena announced on August 28 that it will expand its USDe stablecoin strategy into equity perpetual futures. The move is designed to capture funding yields in stock markets that are significantly higher than those available in crypto right now.

This shift comes as the value of USDe has fallen from nearly $15 billion last year to about $4 billion. The protocol is also waiting for USDe supply to grow by roughly 86% before it can start buying back its native ENA tokens through a proposed revenue-sharing plan.

Why basis trading is moving to stocks

USDe was originally built using a strategy called delta-neutral basis trading. This involves holding crypto collateral while taking a short position on a perpetual contract. A perpetual contract is a type of futures trade that does not have an expiration date. When traders pay positive funding rates to hold leveraged long positions, Ethena collects those payments.

However, funding rates in crypto have dropped this year. Bitcoin perpetual funding averaged just 2.2% through mid-August, compared to 4.9% in 2025 and 11% in 2024. Meanwhile, funding rates on equity perpetuals have averaged around 14% on Hyperliquid and up to 17.5% on Binance.

Ethena founder Guy Young said equity and commodity-linked perpetuals are becoming some of the protocol's most important growth markets. He noted that real-world asset perpetual volume exceeded half of crypto volume on Hyperliquid last month.

The roadmap to ENA buybacks

Ethena is tying future buybacks of its ENA token directly to the recovery of USDe supply. A governance proposal unveiled on August 27 would start directing protocol revenue toward ENA purchases once USDe reaches $7.5 billion in circulation.

Currently, USDe is sitting at approximately $4.04 billion. This means the supply needs to grow by about $3.46 billion, or 86%, before the buyback program activates. The share of revenue allocated to buybacks would increase as supply crosses higher thresholds of $10 billion, $15 billion, and $20 billion.

If activated, 95% of net revenue from USDe savings, white-label stablecoins, and a new service called Ethena X would go toward ENA purchases. The Risk Committee recommended using a 14-day trailing supply average to determine when these thresholds are met.

Yield diversification and risks

As crypto basis positions have declined, Ethena has shifted USDe backing into other areas. DeFi lending now accounts for about 30.8% of reserves, liquid stablecoins make up 32%, real-world assets represent 12.3%, and institutional lending accounts for 11.8%. These areas are generating yields ranging from about 3.1% to 7%.

The expansion into equity perpetuals offers a way to restore basis trading without relying on a surge in crypto leverage. Funding on equity contracts has shown limited correlation with crypto funding, which could help stabilize returns when crypto conditions weaken.

However, the move carries risks. Funding rates can compress as more capital enters the short side. Liquidity may be thinner during market stress, and equity perpetuals trade continuously even when traditional stock markets are closed, creating questions around pricing outside standard hours.

Market reaction and next steps

ENA traders have responded positively to the expansion and buyback proposal. The token traded around $0.163 on August 28, up about 11.6% in 24 hours and nearly 99% over the past 30 days. Trading volume exceeded $2 billion as investors positioned ahead of the potential recovery.

Ethena plans to begin deploying into equity-basis positions over the coming weeks using venues where it already executes crypto trades. The protocol waited to enter this market until equity perpetuals developed deeper liquidity and enough trading history to assess their behavior.

Key numbers

• USDe supply: ~$4.04 billion (down from ~$15 billion peak)
• Threshold for ENA buybacks: $7.5 billion
• Equity funding rates: 14% (Hyperliquid) to 17.5% (Binance)
• Bitcoin funding rate average: 2.2% (through Aug 11)
• ENA price: ~$0.163 on Aug 28

Source

• CryptoSlate