Author: Ryan Firmansyach Chandra | Date: January 2026

Project Research Analyst Junior (3 Project)

RESEARCH REPORT (A): Ethena Labs ($ENA) - The Internet Bond & Synthetic Dollar Paradigm

Sector: Stablecoins / LSDFi | Recommendation: Neutral/Bullish (Short-to-Medium Term)

1. Executive Summary

Ethena Labs positions USDe as the premier "Internet Bond," engineered to decouple crypto-assets from traditional banking infrastructure through a delta-neutral mechanism. By utilizing Liquid Staking Tokens (LSTs) hedged by short derivative positions, the protocol generates an organic annualized revenue of $270.35M (as of January 2026). Currently, USDe is backed by $6.36B in reserve assets with a strategic composition: 64% Stablecoins, 23% BTC, and 12% ETH/LSTs, ensuring full transparency and 1:1 capital efficiency.

Risk Analysis & Systemic Resilience: Distinct from algorithmic models (such as LUNA), USDe maintains a collateralization ratio of >100% backed by tangible assets. Despite proving its stability during the ETH correction from $4,800 to $3,111, the protocol faces significant operational challenges:

• TVL Volatility: A drastic supply contraction occurred from a peak of ~$15B to ~$6.3B in Q4 2025, stress-testing protocol liquidity amidst high exit pressure.
• CEX Dependency: The hedging strategy relies heavily on centralized exchanges (Binance holds 26%), creating substantial counterparty risk.
• Negative Funding: A $62M Reserve Fund is established to mitigate bearish funding periods; however, its long-term adequacy remains a critical variable.

$ENA Tokenomics Projection: As a governance token with a $1.839B market capitalization, $ENA functions as "first-loss capital" to absorb systemic risk. However, investors must be wary of persistent inflationary pressures; $ENA is entering an aggressive emission phase, with the circulating supply projected to hit a maximum cap of 15 billion tokens by Q2 2028. This report concludes that while Ethena has transitioned from a theoretical experiment into a mature financial infrastructure, its sustainability depends on derivative liquidity management and navigating a dense token emission schedule.

2. Value Proposition & Mechanism

USDe functions beyond the scope of a conventional stablecoin; it is a yield-bearing instrument categorized as an "Internet Bond." The protocol operates with high capital efficiency, delivering annualized fees of $270.35M as of January 2026.

• Delta Neutrality: For every $1 of collateralized assets, Ethena executes an equivalent Short Perpetual position to maintain the value stability of USDe. Market data validates this mechanism; during the ETH price correction from the ~$4,800 peak to the $3,111 range, the short perpetual positions acted as a robust hedge, preserving the integrity of the underlying collateral.

• Dual Yield Sources:

  • LST Yield: Organic revenue generated from staking ETH and other LSTs, which constitute 12% of the total reserves.
  • Funding Payments: Revenue captured from short positions during bullish market regimes. Based on January 2026 data, the Aggregated Funding Rate averaged 0.0100, demonstrating Ethena’s consistent capacity to extract value from derivative markets for yield distribution.

• Yield Risk Management: While the funding rate is projected to remain positive at approximately 0.0089, fluctuations into negative territory (as observed in October 2025) represent a primary risk vector. Under such conditions, the protocol relies on its $62M Reserve Fund to sustain yield stability and protect the user experience.

3. Deep-Dive Tokenomics ($ENA)

$ENA serves as the native governance token, tasked with overseeing the protocol's risk parameters. As of the current reporting period, $ENA maintains a market capitalization of $1.839B.

A. Token Utility & Staking: