Ethena was founded in 2023 by Guy Young through Ethena Labs. Ethena Labs was established to reshape the decentralized finance (DeFi) landscape.
Guy Young, in establishing Ethena Labs, brought extensive experience after years of working in TradFi. Young’s vast experience in the finance sector spurred the development of a new kind of financial product.
Ethena, as an idea, was inspired by the inefficiencies of traditional stablecoins. This was a problem Arthur Hayes, Founder of Bitmex, discussed earlier.
Young adopted the concept and attempted to leverage Ethereum’s unique properties, including liquid staking, to produce a neutral stance. The adoption of this concept gave birth to Ethena’s main product – USDe.
Ethena aims to solve the problem of over-reliance on the traditional banking infrastructure with already existing stablecoins.
Thus, the Ethena model is aimed at offering derivative infrastructure to help Ethereum transition into a yield-bearing synthetic dollar. In essence, Ethena’s first product, USDe, was designed as a delta-neutral synthetic dollar.
Users deposited USD, Ethereum, or other liquid staking tokens as collateral to create USDe. In July 2023, Ethena’s idea became a reality after securing its first funding round, raising $6 million. Dragonfly led the funding, while other crypto players, including Arthur Hayes, Maelstrom, and derivatives exchanges, participated too.
After the seed funding, Ethena completed a $100 million fundraising round in December 2024. Major investors such as Franklin Templeton and F-Prime Capital joined the fund drive. In March 2024, the second B-series funding round raised an additional $16 million, bringing the total to $136 million.
The funding paved the way for the launch of its stablecoin and bond assets. After a successful funding round, Ethena’s USDe was launched in February 2024. Shortly after its launch, the synthetic dollar USDe saw massive adoption and established itself as a major player in the crypto space.
In fact, by December 2024, USDe’s supply hit a record $6 billion, making it the third-largest stablecoin. It also became the fastest USD-denominated stablecoin to reach a $5 billion supply.
Coupled with that, 2024 proved successful in revenue generation. Ethena surpassed $1.2 billion in annualized revenue by its first year of operation. By December 2024, the protocol had also recorded the highest FTE.
With adoption and market acceptance, Ethena’s growth has remained steady over the past 2 years. In fact, the Protocol’s Total Value Locked rose to $14.9 billion in 2025, before falling to $5.5 billion at press time.
Besides USDe, Ethena’s governance and utility token, ENA, has also evolved into a productive asset that secures the protocol. Also, ENA is used to accrue revenue for stakers.
To keep pace with rapid growth, Ethena has continued to expand its scope through upgrades and ecosystem developments. For instance, Ethena raised $100 million and launched iUSDe in 2025. This product is specifically designed for TradFi, allowing asset managers, prime brokers and private credit funds to hold yield-bearing stablecoins.
Coupled with that, Ethena has undergone a series of upgrades to improve functionality and competitiveness. The network’s Mint and Redeem V2 contract was upgraded to optimize the minting and burning of USDe mechanisms.
Finally, Ethena activated the fee switch, allowing protocol revenue to be shared with ENA token holders. The introduction unlocked millions in token buybacks after reaching a major USDe revenue and supply milestone.
In July 2025, Ethena and StablecoinX announced an ENA token buyback program, with $260 million allocated to repurchase locked ENA tokens. Stablecoinx would acquire 3 billion ENA to help stabilize the ecosystem.
