Ethena looks beyond crypto to squeeze yield from booming equity perpetuals

Ethena (ENA), the crypto protocol best-known for its $4 billion “synthetic dollar” USDe (USDe), is looking beyond crypto markets for the next source of yield, betting that the boom in leveraged stock trading can provide richer and more reliable returns.

The protocol said Friday it plans to expand its basis-trading strategy into equity perpetual futures, whose open interest has ballooned to $6.2 billion from less than $1 billion in March. Funding rates on those contracts averaged roughly 14% on Hyperliquid and 17.5% on Binance in the past months, compared with low single digits for bitcoin over the same period, according to Ethena.

Ethena expects to announce its first exchange partners and deployments for the equity strategy in the coming weeks. Longer-term, it expects real-world asset perpetuals to overtake crypto derivatives in USDe backing within 12 to 24 months.

The expansion comes as Ethena looks for new sources of returns after USDe supply fell below $5 billion from a peak near $15 billion. The move followed Thursday’s major ENA token overhaul, in which the Ethena Foundation unveiled a major overhaul of ENA’s token economics, eliminating monthly VC unlocks while holding a vote on directing revenues from Ethena businesses toward token buybacks.

Same trade, different market

The strategy is essentially the same trade Ethena has run since USDe's launch with Bitcoin, Ether and Solana (SOL): hold exposure to an asset, short its perpetual contract and collect the funding paid by leveraged long traders.

That trade, however, became much less lucrative in crypto this year as prices plunged and the market cooled. Bitcoin funding averaged 11% in 2024 and 4.9% in 2025 before falling to just 2.2% this year through Aug. 11, Ethena noted.

Equity perps, meanwhile, have gone the other way. Funding was positive on 94% of days on Hyperliquid and 97% on Binance once those markets reached meaningful scale, according to Ethena. The median equity funding rate was 13.9%, versus 3.9% for bitcoin.

“One other interesting characteristic which makes this more attractive versus crypto is the natural positive skew of funding distribution,” co-founder Guy Young said in an X post.

Stocks have tended to rise over long periods, Young said, creating persistent demand to pay for leveraged long exposure. Crypto funding can instead compress or turn negative during bear markets when demand for leverage dries up.

Equity funding also showed almost no correlation with bitcoin funding, potentially giving USDe a return stream less reliant on the crypto market.

Tapping a much larger market

The opportunity is potentially much larger than crypto. Global equities were valued at about $166.5 trillion in July, compared with roughly $2.2 trillion for crypto, though equity perpetuals remain a fraction of the size of their crypto counterparts today.

The expansion adds to Ethena’s initiative to find new sources of return after USDe supply fell below $5 billion from a peak near $15 billion.

Last week, it also announced a $1 billion FalconX facility that can put USDe backing into overcollateralized institutional loans.

Ethena said it expects real-world asset perpetuals to eclipse crypto derivatives in USDe’s backing within 12 to 24 months.