Risk management is one of the fundamental building blocks of Ethena; because the synthetic dollar model inherently carries risks such as liquidation risk, performance of the backing assets, etc. However, you can observe that the technical infrastructure of the project is extremely robust, thanks to the advanced delta-hedging strategies and smart contract audits that Ethena offers to minimize these risks.
Frequently Asked Questions About Ethena (ENA)
What is Ethena?
Ethena is a synthetic dollar protocol running on the Ethereum blockchain. Its goal is to provide a crypto-native solution outside the traditional banking system and the accessibility of a globally accessible savings instrument, the Internet Bond. It offers investors a stable currency in dollars and a yield-generating instrument.
Delta-hedging is a strategy used in the buy bulk sms service field of financial risk management. In Ethena, long positions are taken in spot assets (stETH, Bitcoin, Solana) and short positions are opened in perpetual futures positions. This aims to keep the value of USDe constant by balancing price fluctuations. For example, if the price of the spot asset increases, the loss in the futures position offsets this increase.
What is sUSDe and how does staking work?
sUSDe is the staking version of USDe. Investors stake their USDe to earn sUSDe and earn returns by sharing in protocol revenues. The returns come from spreads from futures markets and other economic activities.
- Board index
- All times are UTC
- Delete cookies
- Contact us