Stablecoins are one of the breakout killer apps of crypto, but crypto investors have often faced a frustrating problem. There are a lack of opportunities to invest in stablecoins. The biggest stablecoins, which are also the biggest fee-generators in the industry, Circle and Tether, have no tokens, making them inaccessible to retail investors.
What then is the best way to bet on stablecoin growth?
It might be Ethena.
In this article
The Stablecoin Opportunity
The Birth of Ethena: How Arthur Hayes' concept became a $6B protocol
Ethena's Product Suite: USDe, sUSDe, USDtb, iUSDe, ENA and their functions
ENA Tokenomics: Supply distribution, vesting schedule, and utility
The sENA Investment Case: Staking mechanics and reward structure
Converge Network: Ethena's vision for a settlement layer bridging DeFi and TradFi (including existing ecosystem protocols)
The Investment Opportunity: Does sENA offer a compelling way to bet on stablecoin growth? (risks included)
If there’s an easy bet in this industry, it’s that stablecoins will continue to grow.
While speculative tokens rise and fall with market cycles, stablecoins and tokenized real-world assets show the steadiest, strongest growth. Along with Bitcoin, they have the highest probability of reaching escape velocity into everyday usage.
Exhibit A: When sorting projects by 1Y revenue, Tether is unmatched. Circle takes 2nd place, Ethereum 3rd, and Tron (responsible for $6T of stablecoin transfer volume over the last year) earned over $600m.
The slowdown of stablecoin market cap throughout 2022-2023 showed what happens when new stables don’t come into the ecosystem.
Now that that’s changed, how can we position ourselves to make money from this trend?
Back in 2023, Arthur Hayes proposed an idea for a new kind of stablecoin.
Here’s the mechanism:
Out of this concept Ethena was born.
// Enabling Internet Money_
Guy Young founded Ethena Labs in 2023 and built a DeFi protocol on Ethereum.
The team is aiming for a crypto-native dollar and savings system. The team raised $106M through several rounds, with USDe (the “NakaDollar” product) hitting $6B market cap.
USDe is now the 3rd largest stablecoin by market cap.
Ethena’s mission: Deliver a stable, scalable, decentralized "Internet Money" (USDe) and "Internet Bond" (sUSDe) independent of traditional banking.
Here’s a rundown of Ethena’s products:
