Ethena's Rewards Fuelled by Delta-Neutral Staking Strategy

Ethena's synthetic dollar protocol has distributed over $751 million in rewards to users since its launch, making it one of the most successful DeFi protocols. The delta-neutral staking strategy used by Ethena generates yield from funding-rate payments and staking yields.

The protocol takes staked ETH derivatives as collateral and opens short perpetual futures positions against them, canceling out the value instability. This has delivered an average APY of 10.9% on sUSDe since January 2024.

However, despite the impressive rewards, the protocol's USDe supply has fallen to approximately $4.3 billion from a peak of over $10 billion in October 2025. The decline represents more than a 55% drop and is attributed to shifting market conditions following significant events.