Ethena Seeks Yield Beyond Crypto with Equity Perpetual Futures Expansion

Ethena, the protocol behind the $4 billion 'synthetic dollar' USDe, is expanding its basis-trading strategy into equity perpetual futures. This move follows a significant drop in USDe supply and a major overhaul of Ethena's token economics.

The expansion targets the booming leveraged stock trading market, where funding rates on equity perpetual futures have averaged 14% on Hyperliquid and 17.5% on Binance over the past months. In contrast, bitcoin funding rates were in low single digits during the same period.

Ethena's strategy involves holding exposure to an asset, shorting its perpetual contract, and collecting funding paid by leveraged long traders. This trade has become less lucrative in crypto markets this year due to plunging prices and market cooling.

Co-founder Guy Young noted that the natural positive skew of funding distribution on equity perps makes them more attractive than crypto markets.