Ethena

ENA governs the protocol that maintains USDe, a dollar-denominated asset backed not by cash in a bank but by crypto collateral hedged with short perpetual futures. It is the most economically distinctive stablecoin design at scale, and its risks are entirely different from a fiat-backed token's.

The hedge is the backing

Hold spot ETH and short an equal amount of ETH perpetual futures, and the combined dollar value stays roughly constant however the price moves. There is no bank deposit and no Treasury — the peg comes from offsetting positions rather than from reserves. Understanding this is the difference between evaluating the asset and guessing at it.

Yield comes from funding rates

Perpetual futures pay funding between longs and shorts, and in bullish conditions longs pay shorts. The protocol is short, so it collects. That is a real, identifiable cash flow rather than token emissions, which puts it ahead of most yield in DeFi on transparency of source.

Funding can invert, and that is the core risk

In sustained bearish conditions shorts pay longs and the income becomes a cost. The design's genuine stress test is a prolonged period of negative funding combined with market turmoil — precisely when hedges would need to be unwound at scale. That scenario has not yet occurred at the protocol's current size.

Exchange counterparty exposure

The hedges sit on centralised venues. Collateral is held with custodians rather than on the exchange itself, which reduces but does not remove the exposure: a major venue failing during volatility would hit the backing directly. This is a category of risk that fiat-backed stablecoins simply do not have.

What ENA governs

Risk parameters, which venues and collateral are used, and the distribution of protocol revenue. Governance over venue selection is the substantive right, because venue choice is where the counterparty risk actually lives.