Ethena offers 27% on stablecoins but where is the yield coming from?
The launch of so-called ‘synthetic dollar’ Ethena ( USDe ) took place on Monday, alongside a heavily-shilled points programme, labelled as a ‘Shard Campaign.’ So far, over $300 million has been deposited into Ethena, which promises an internet bond with a ‘real yield’ of 27% for users who stake USDe. However, many are sceptical of the project’s sustainability, accusing Ethena of shortsightedness with respect to the source of the yield . After all, this isn’t the first time a stable source of high-yields has been marketed to the masses. The stable coin (or ‘synthetic dollar‘) is backed by a delta-neutral position that balances a basket of staked ETH derivatives with ETH shorts on centralized exchanges (CEX). The high yields that have been promised are achieved by adding together the native staking yield (around 5%) and the funding rates paid to shorts, which is currently high ( over 20% ) due to bullish overall market sentiment. The tra...