The Ethena (ENA) protocol, famed for its $4 billion "synthetic dollar" USDe, is pivoting its strategic focus beyond the cryptocurrency market, aiming to capture more lucrative and stable returns from the booming leveraged equity trading sector.
The initiative, announced on Friday, involves extending its basis trading strategy into equity perpetual futures to counter the challenge of narrowing yields in the current crypto market. This shift marks a critical step for Ethena as it hunts for new revenue engines following a decline in USDe supply from a peak of around $15 billion to below $5 billion. Notably, open interest in this arena has surged from under $1 billion in March to $6.2 billion, highlighting the substantial growth potential and liquidity appeal of the sector.
Looking at the yield logic and market data, equity perpetuals present a significant profitability advantage. Data compiled by Woofun AI reveals that over the past few months, average funding rates for such contracts have been approximately 14% on Hyperliquid and a striking 17.5% on Binance. In comparison, Bitcoin funding rates have hovered at single-digit levels during the same period, underscoring the vast disparity. Ethena points out that Bitcoin's average funding rate was 11% in 2024, fell to 4.9% in 2025, and had dropped further to 2.2% as of August 11 this year. Equity perpetuals tell a different story: once the market reaches a certain scale, funding rates were positive on 94% of days on Hyperliquid and 97% of days on Binance. The median funding rate for equity perpetuals stands at 13.9%, versus just 3.9% for Bitcoin.
The structural roots of this difference lie in market fundamentals. Co-founder Guy Young explained on X that another feature making this strategy more attractive than crypto is the natural positive skew in funding distribution. Since equities tend to trend upward over the long term, demand for leveraged long positions is persistent; whereas during bear markets, crypto funding rates can decrease or even turn negative as demand for leveraged products wanes. Furthermore, equity perpetual funding rates have almost no correlation with Bitcoin funding rates, meaning USDe's yield sources will no longer be overly reliant on cryptocurrency market volatility.
From a market scale perspective, global equity markets were valued at approximately $166.5 trillion in July, compared to a total crypto market value of about $2.2 trillion. While equity perpetuals are still much smaller than their crypto counterparts, the potential opportunity behind them is considerably larger.
This strategic expansion follows significant internal reforms. On Thursday, the Ethena Foundation announced a major overhaul of the ENA Tokenomics, eliminating the monthly VC unlock mechanism and outlining a plan to allocate revenue generated from Ethena's operations toward token buybacks. This strategy is essentially the same market-making approach Ethena has employed for Bitcoin (BTC), Ethereum (ETH), and SOL since USDe's launch: holding an asset while shorting its perpetual to collect funding fees from traders using leverage for long positions. However, due to this year's crypto price slump and cooling market sentiment, the profitability of this traditional market-making strategy has contracted sharply, compelling Ethena to seek fresh growth avenues.
Beyond shifting to equity perpetuals, Ethena last week announced the establishment of a $1 billion FalconX program designed to use USDe as collateral for over-collateralized institutional lending, further expanding its use cases. Ethena anticipates revealing its first equity strategy partner and application plan in the coming weeks to accelerate this rollout.
From a longer-term perspective, the company expects that within 12 to 24 months, perpetuals backed by real-world assets will account for a larger share of USDe-related business than crypto derivatives. This is not merely a structural adjustment but a redefinition of future yield sources. This strategic pivot reflects Ethena's determination to find new revenue streams after USDe supply fell from a peak of nearly $15 billion to below $5 billion. Within the 12 to 24-month timeframe, Ethena aspires for real-world asset-backed perpetuals to surpass crypto derivatives in their share of USDe-related operations.
This extension from crypto-native assets to real-world assets (RWA) not only aids in risk diversification but also leverages the long-term upward trajectory of equity markets to secure more stable funding rate income. As equity perpetual volumes expand on platforms like Hyperliquid and Binance, Ethena is well-positioned to gain a first-mover advantage in this emerging field, offering USDe users more compelling yield performance. Following the FalconX institutional lending initiative, this marks another significant milestone in Ethena's diversified yield strategy, signaling that stablecoin protocols are progressively breaking through the confines of the traditional crypto market to explore a broader financial ecosystem.
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