Ethena is a decentralized stablecoin protocol built on Ethereum, designed to provide a synthetic dollar (USDe) for use in decentralized finance (DeFi) and Web3 applications. Unlike traditional stablecoins that rely on fiat reserves, Ethena employs a delta hedging strategy, utilizing cryptocurrency collateral and short futures positions to maintain the stability of USDe. The protocol's native governance token, ENA, allows holders to participate in decision-making processes within the Ethena ecosystem. ENA can also be staked for rewards, offering users opportunities to earn yields from the protocol's operations.
Ethena aims to address challenges associated with traditional stablecoins, such as centralization risks and lack of transparency, by providing a decentralized and censorship-resistant financial system. This approach ensures that users can access stable digital assets without relying on intermediaries, enhancing the overall resilience and accessibility of DeFi solutions.