Ethena (ENA) operates as a DeFi (Decentralized Finance) ecosystem. The protocol integrates advanced lending and staking processes. Additionally, it leverages a proprietary-built stablecoin to reduce volatility. Here”s everything you need to know.
Ethena is a popular option for stakers and those seeking stable on-chain crypto-native solutions. Notably, the network has $3.6B in TVL (total value locked) and +228k active users. This growth is in addition to continually expanding strategic partnerships across the web3 space.
What Problems Does Ethena Attempt to Fix?
Ethena seeks to reduce some major pain points in the DeFi space. For one, the network reduces risk for stablecoin users through its unique architecture and features. Additionally, Ethena users can use multiple assets across the ERC ecosystem.
Source – Ethena (ENA) Homepage
Instability
One of the main drawbacks and roadblocks to the option for the blockchain market is volatility. Since day one, developers have thought of ways to keep digital assets stable. Stablecoins are the evolution of this desire. Ethena reduces volatility for users and stakers via its proprietary architecture. Specifically, the network integrates automated counterparty risk management, negative funding rate risk, and deleveraging risk features as part of this strategy.
Security Risks
Ethena integrates some key security precedents to prevent hacks and other losses of funds. For example, the network creates smart contract keys via an air-gapped wallet. This approach provides the security of cold wallets with the yield-generating benefits of DeFI systems.
Benefits of Ethena
Ethena brings some unique benefits to the sector. For one, the protocol is open-source and censorship-resistant. It’s easy to use and designed to enable anyone to enter the DeFi sector without technical skills. Additionally, users can access core features in a permissionless manner, including yield-generating solutions like staking pools and more.
Compound Earnings
One of the best aspects of Ethena is its compound earnings features that make it easy to build up rewards automatically. The network structure improves capital efficiency via the use of liquidity and minting pools. These rewards are deposited automatically into your wallet, enabling you to automate compounding returns.
Flexible
Ethena provides unmatched flexibility for stakers. The protocol integrates a variety of popular DeFi networks to improve usability and functionality. Specifically, the system supports external liquid staking services, enabling you to stake ETH, WBETH, mETH, and more across leading platforms like Pendle and Curve.
Rewards
Another benefit that Ethena users enjoy is access to frequent rewards programs and bonuses. The protocol has a bonus boost feature that enables users to secure 50% more rewards. To qualify, users need to lock 50% or more of their ENA relative to their USDe balance. Additionally, a weekly look-up reward can go as high as 20%.
Multisig Wallet Support
Another cool feature that makes Ethena stand out is the automated multisig protections. Multisig wallets are a core component of security protocols today. They simply require multiple people to provide keys to approve a transaction. In The Ethena ecosystem, any large fund transfer requires multi-sig approval. This option is a simple but effective way to reduce hacking risks.
How Does Ethena (ENA) Work?
Ethena leverages the security of the Ethereum blockchain. Specifically, the ERC4626 Token Vault standard adopted from OpenZeppelin was integrated to provide a strong and secure architecture for the stablecoin ecosystem.
Whitelisted User Wallet
During times of high market volatility, the Athena protocol limits major network actions to whitelisted wallets. These addresses can mint and redeem USDe after completing a vetting process to ensure their stability and trustworthiness.
Staking Pools
Ethena’s main feature for those seeking rewards is its staking protocols. Users can stake ENA and USDe seamlessly across top-performing networks to secure passive, low-risk returns. Staking is ideal for new users as there is minimal risk of losing your staked asset, and you can use a staking calculator to know your payout.
Liquidity Pools
Liquidity Pools operate similarly to stalking protocols, with the main difference being that you lock up your funds to provide liquidity to other projects rather than security to a network. Additionally, you receive a liquidity token representing your staked asset. Users can stake their tokens and restake their rewards in liquidity pools, further improving their results.
Token – ENA
Ethena uses a dual token strategy designed to prevent inflation and provide more stability to users. The ENA token is the primary utility token. Users can interact with network features, stake tokens, and access governance systems.
USDe
The USDe token operates as a synthetic dollar protocol. Unlike competitors that leverage fiat or crypto reserves, Ethena’s synthetic dollar leverages delta-neutral ETH and BTC positions and short futures positions as collateral. This strategy has proven to be highly effective at keeping the USDe pegged to the value of USD.
Users can use USDe for collateral across various exchanges to margin trade. Margin trading improves both return and risk exposure. Professional traders use this method to access short-term funding.
Governance
Ethena users can vote on network upgrades. They can also suggest features, fee changes, and other changes that will go up to a community vote. This style of community governance enables DeFi networks to grow organically while remaining in touch with their community.
How to Buy Ethena (ENA)
Currently, Ethena (ENA) is available for purchase on the following exchanges.
Kraken – Founded in 2011, Kraken is one of the most trusted names in the industry, with over 9,000,000 users and over $207 billion in quarterly trading volume.
Kraken exchange offers trading access to over 190 countries, including Australia, Canada, and Europe, and is our most recommended exchange for USA residents. (Excluding New York & Washington state)
KuCoin – This exchange currently offers cryptocurrency trading of over 300 other popular tokens. It is often the first to offer buying opportunities for new tokens. Restrictions may apply, depending on location.
Gate.io – This exchange was established in 2013 and is one of the more popular & reputable exchanges. Gate.io currently accepts most international jurisdictions including Australia & the UK. USA & Canadian residents are prohibited.
Ethena (ENA) – A new Stablecoin and Reward Opportunities for Traders
Defi users are sure to appreciate Ethena’s combination of in-house liquidity staking options and stablecoins. The network remains a strong contender in the market and has seen considerable growth over the last year. As such, it’s a cool project worth checking out.
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