What Is USDe? How Does the Ethena Protocol Work explained for My Wallet users, including key terms, how it works, and practical tips.
Ethena is an independent DeFi project. My Wallet provides only a technical interface for accessing its features and does not control the protocol or guarantee its returns. All operations are performed at your own risk—always DYOR before making any decisions.
In this article:
USDe is a stable digital asset, also referred to as a synthetic dollar. Its stability is maintained through a specialized investment strategy implemented by Ethena, the issuer of USDe.
Funds raised from USDe sales are used by Ethena to open trading positions on centralized exchanges. The idea is to maintain a balance between long and short positions:
One part of the capital is used to purchase and hold assets like ETH, BTC, and others on the spot market (long positions).
The other part is used to open short positions on the same assets in the futures market.
If the assets held in long positions fall in price, the short positions offset the losses.
If the market rises, the short positions lose value, limiting the gains from the long positions.
This strategy helps neutralize market movements and keeps the price of USDe close to $1. It’s also known as a delta-neutral strategy.
Ethena may adjust the ratio, leverage, or tools based on market conditions—but the core mechanism remains the same.
Ethena allows USDe holders to stake their assets for a fixed period, starting from 7 days. Locking USDe helps the protocol to manage capital more efficiently across its trading strategies. The income generated from these strategies is then distributed among all staking participants.
The yield comes from funding fees—small payments that traders make to one another on centralized exchanges to maintain price balance between long and short positions.
When the market is rising, traders who bet on price increases (long-positions) pay a small fee to those holding short positions. Since Ethena takes short positions, it regularly receives these payments and distributes them to users who stake USDe.
Acquire USDe tokens.
You can obtain USDe in My Wallet or via STON.fi and DeDust.
Open the Staking section.
Select USDe and specify the amount to stake.
Tap "Check Eligibility" to see if you qualify for the up to +10% APY Boost.
This redirects to TON ID Telegram Mini App for eligibility check. Learn more about the APY boost here.
Сonfirm the action.
Done! Rewards will begin to accrue automatically.
You can request unstake of your deposit and earned rewards anytime. Funds will return to your wallet in 7 days according to Ethena’s standard withdrawal period.
Yield varies over time depending on market conditions. For example, in 2024, the average annual yield reported by Ethena was approximately 18% APY.
As with any DeFi protocol, there are risks—including market volatility, changing yields, and technical failures. Make sure you understand how the protocol works before making any decisions.
ethena.fi Official Ethena Website
docs.ethena.fi Technical Documentation
Contact our support team—we’re always here to help.
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