USDe developer Ethena has raised a new funding round at a valuation of $300 million.
Update (7:52 a.m. ET): Due to incorrect information received from Ethena Labs and at Ethena Labs’ request, the article has been updated to remove investors in this strategic fund: Brevan Howard Digital, PayPal Ventures, Franklin Templeton, Fidelity via Avon Ventures, Binance, Deribit, Gemini, and Kraken. round.
Developer Ethena Labs Ethereum 
ETH
+3.38%
Stablecoin USDe raises $14 million in strategic funding round.
Dragonfly and Maelstrom, the family office of BitMEX founder Arthur Hayes, co-led the round, Ethena Labs said Thursday.
Ethena pledged more than $50 million in this round, but capped it at $14 million because it doesn’t currently need more cash, founder and CEO Guy Young told The Block. Young added that the round began in late December and closed this week and consisted of simple contracts for future assets through token warrants.
He added that this round values Ethena at $300 million.
Ethena also publicly launched its USDe stablecoin following its stealth launch last December, pegging its total value at over $224 million. According to Hayes, who backed Ethena’s $6 million seed round through Maelstrom last year, USDe could soon surpass $1 billion in TVL and “will soon become a credible challenger to Tether.” Hayes is also a founding advisor to Ethena.
Ethena was inspired by Hayes’ blog post “Dust on Crust” from last year. There he outlined his vision for a cryptocurrency-based derivative-based stablecoin that would operate independently of traditional financial banking systems.
What is Ethena’s USDe stablecoin?
USDe is an Ethereum-based stablecoin protected by derivatives. Achieve price stability through “delta-neutral” hedging across centralized and decentralized venues. Simply put, USDe is backed by long staked Ether positions and short Ether positions.
This approach “offers losses or gains from any position, providing a dollar-denominated return profile,” Ethena said. “This is conceptually the same as a typical cash and carry strategy conducted using Treasury bonds and futures.”
To generate USDe, Ethena allows users to deposit US dollars, ETH, or liquid staking tokens as collateral.
Ethena’s ‘Value Creation Internet Bond’
Ethena’s second product is a dollar-denominated savings product called ‘Internet Bond’. Ethena said the bond provides value accrual through sUSDe (the staking version of USDe) by capturing both the native staked Ether yield and the basis of the futures market. The average annual return on bonds over the past two months has been between 12 and 20 percent, Ethena added.
Founded last year, Ethena is headquartered in Lisbon, Portugal. After securing the new capital, Young said the company plans to grow its current team of 12 by hiring quantitative engineers and business development executives in Asia.
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