Ethena is a synthetic dollar protocol developed on the Ethereum blockchain, which aims to provide a crypto-native alternative to traditional banking infrastructure. Additionally, it also offers globally accessible savings instruments denominated in dollars, known as ‘Internet Bonds’.

At the heart of Athena is its synthetic dollar, USDE, which is designed to be censorship-resistant, scalable, and stable. This stability is achieved through delta-hedging Ethereum collateral, ensuring that USDE remains fully backed and transparently on-chain. Furthermore, USDe can freely interact with various DeFi protocols.

To maintain its peg stability, USDE uses delta hedging derivative positions against collateral held within the protocol. This mechanism helps ensure the reliability of USDE’s value over time.