Ethena Extends USDe Revenue Model with Tokenized-Stock Trades

Ethena has announced an extension to its revenue model for USDe by incorporating tokenized-stock trades. This move adds a new source of potential return and introduces dependencies that must be carefully managed.

The Binance-linked tokenized-equity basis trade will enable USDe rewards, but it relies on the alignment of three separate markets: the conventional equity market, the tokenized stock, and the equity perpetual derivative contract. If these prices diverge too far, the short position may no longer effectively offset the value held in the tokenized stock.

The arrangement works best when the prices stay close, but it's not a guarantee of success. The trade involves several operators, including the token issuer, custody and redemption arrangements, Binance's derivatives market, available liquidity, and Ethena's own execution process.