USDe Mechanics
USDe is a synthetic dollar that maintains its peg through delta-neutral hedging. Instead of holding fiat reserves in a bank, Ethena pairs staked ETH collateral with short perpetual futures positions - when ETH moves in either direction, gains and losses cancel out, keeping each USDe worth $1.
Delta-Neutral Hedging Flow
Watch how ETH collateral and short perps work together to maintain a stable dollar value. Drag the ETH price slider to see real-time rebalancing.
Price Movement Simulator
Adjust ETH price to see how the delta-neutral position maintains its dollar value.
Minting & Redemption Process
Users deposit ETH or stETH into Ethena. The protocol stakes the ETH to earn staking yield, then opens an equal-value short perpetual position on centralized exchanges via OES (Off-Exchange Settlement) custodians. USDe is minted 1:1 against the delta-neutral position value.
To redeem, users burn USDe. The protocol unwinds the corresponding delta-neutral position - closing the short perp and releasing the staked ETH. The underlying collateral is returned at current market value, maintaining the 1:1 dollar peg throughout.
Collateral Breakdown
How Ethena's backing is distributed across staked ETH variants and exchange venues.
USDe vs Traditional Stablecoins
| Feature | USDe (Ethena) | USDC (Circle) | DAI (Maker) |
|---|---|---|---|
| Backing | Delta-neutral crypto | Fiat reserves | Over-collateralized crypto |
| Native Yield | 15-25% APY | 0% (held by Circle) | DSR ~5-8% |
| Bank Dependency | None | Full | Partial (RWA) |
| Censorship Risk | CEX dependency | Freezable | Low |