Ethena Dives into Equities as Hyperliquid Deployer Shuts Down

Ethena, the protocol behind the synthetic dollar USDe, has announced two significant moves in the crypto space. Firstly, it will be expanding into equities and commodities as reserve backing, a potential game-changer for its users. Secondly, and somewhat unexpectedly, it is shutting down its HyENA deployer on Hyperliquid's HIP-3 framework.

The HyENA deployer has been facilitating perpetual futures markets on the platform, but with Trade.xyz dominating over 96% of open interest in equity perpetuals within HIP-3, Ethena's deployer had become a bit player. As such, it seems the protocol has decided to focus its efforts elsewhere.

Ethena has been running a basis trade strategy since its inception, and by tapping into equity perpetuals, it projects a 30x expansion of the total addressable market for USDe backing. This move is made possible due to the rapidly growing tokenized equity markets on Hyperliquid, creating the necessary infrastructure.

The protocol has also secured a $1 billion credit facility with FalconX, enabling overcollateralized institutional loans and adding another layer to Ethena's reserve strategy beyond perpetual futures positions. Users with open positions on the affected markets need to exit before September 2nd, as liquidity will likely thin out after that date.