Ethena expands USDe yield strategy into booming equity perpetuals

Ethena looks to stock market for better stablecoin yields

Ethena, the crypto protocol behind the $4 billion synthetic dollar USDe, announced it will expand its yield-generating strategy into equity perpetual futures. The protocol views this move as a way to secure higher and more reliable returns outside of traditional crypto markets.

The decision comes as USDe supply has dropped significantly from its peak of nearly $15 billion in 2025, falling to below $5 billion. By tapping into the stock market, Ethena hopes to rebuild revenue streams that are less dependent on the volatile cycles of crypto assets.

Key yield metrics and market growth

• Equity perpetual open interest surged tenfold since March to reach $6.2 billion.
• Funding rates on equity perpetuals have averaged 14% on Hyperliquid and 17.5% on Binance recently.
• In contrast, Bitcoin funding rates have fallen to just 2.2% year-to-date through Aug. 11.
• Ethena expects real-world asset perpetuals to overtake crypto derivatives in USDe backing within 12 to 24 months.

Why equity perps offer an advantage

The core trade remains the same: hold exposure to an asset, short its perpetual contract, and collect the funding paid by leveraged long traders. However, the environment for this trade has shifted.

Crypto funding became much less lucrative this year as prices plunged and market interest cooled. Equities have followed the opposite trend. According to Ethena, equity funding was positive on 94% of days on Hyperliquid and 97% on Binance.

Guy Young, Ethena’s co-founder, noted on X that stocks tend to rise over long periods, creating consistent demand for leveraged long exposure. This "natural positive skew" makes equity funding more attractive and less likely to turn negative during market downturns compared to crypto.

Tapping a larger global market

The shift allows Ethena to access a vastly larger market. Global equities were valued at approximately $166.5 trillion in July, compared to roughly $2.2 trillion for the entire crypto market. While equity perpetuals are currently a fraction of the size of crypto counterparts, the potential ceiling is significantly higher.

This expansion follows other recent moves by the protocol, including a $1 billion facility with FalconX to provide institutional loans and a major overhaul of ENA token economics last week to align incentives.

Timeline for deployment

Ethena said it plans to announce its first exchange partners and specific deployments for the equity strategy in the coming weeks.

Source

• CoinDesk