BlockworksAdvisory
Fri, 06 Mar 2026 17:13:50 +0000
General

Ethena’s January and February 2026 Governance Update

Welcome to the first installment of this year’s monthly governance update, covering all major developments in January and February 2026. This report highlights significant protocol developments, key risk metrics, and major ecosystem expansions.

Key Takeaways

Ecosystem Expansion: Ethena’s white label stablecoin product has grown, expanding to the MegaETH and Sui ecosystems, with USDm and suiUSDe, respectively. Together, they have crossed $100M in total circulating supply for the first time.

Reserve Fund Strength: The Reserve Fund stands at $62.51 million. Analysis by the Risk Committee confirms the fund is adequate, with the current size exceeding the recommended coverage for potential drawdowns.

Protocol Solvency: The protocol remains over-collateralized with a solvency ratio of 101.11%, providing a healthy buffer above the 100% threshold.

Yield Competitiveness: Despite broader market conditions having pushed all stablecoin yields down, sUSDe continues to offer consistent yield opportunities with an APY of 3.59%, outperforming other major stablecoin savings rates like the Aave USDC lending rate (2.54%).

Protocol & Risk Metrics

Supply and Yield:

USDe: The total supply of USDe closed February at $6.07 billion, maintaining a steady level since the start of the year.

sUSDe: The supply of staked USDe (sUSDe) is 3.528 billion, resulting in a staking ratio of 57.96%, slightly above the end of December’s ratio of 55.25%.

Protocol Yield: The sUSDe APY is currently 3.59%, reflecting poor market conditions but in line with other stablecoin yields.

Source: Blockworks Ethena Dashboard, Overview, Mar 6th, 2026

Source: Blockworks Ethena Dashboard, sUSDe, February 27th, 2026

Source: Blockworks Ethena Dashboard, sUSDe, February 27th, 2026

Source: Blockworks Ethena Dashboard, sUSDe, February 27th, 2026

Liquidity & Redemptions:
The protocol maintains somewhat constant liquidity depth across Curve, Uniswap, Fluid and other venues, with around $193M of USDe DEX liquidity across Ethereum, Plasma and Mantle. Furthermore, minting and redeeming events continue to be healthily absorbed by the mint/redemption contract, with almost $100M stablecoins available for immediate redemption.

Source: Blockworks Ethena Dashboard, USDe, February 27th, 2026

Source: Blockworks Ethena Dashboard, USDe, February 27th, 2026

Source: Blockworks Ethena Dashboard, USDe (Risk), February 27th, 2026

Risk & Resilience Metrics:

Solvency: The protocol’s solvency remains healthy at 101.11%. This indicates that the value of backing assets exceeds the outstanding USDe liability by a comfortable margin.

Reserve Fund: The Reserve Fund capitalization is $62.54 million and the latest analysis confirms this amount is sufficient to cover potential drawdowns under current market conditions.

Collateral Composition: The protocol maintains a diversified collateral base. System backing is dominated by liquid stables, with this share increasing from 64.5% at the start of the year to 75.1% by end of February. This shift is expected given the general deterioration in market conditions, which compresses basis trade profitability and reduces the relative attractiveness of that strategy compared to yield-bearing liquid stables.

The liquid stables allocation is currently comprised of blue-chip stables (USDC, USDT, and PYUSD) at 47.3%, stables deployed on lending protocols such as Aave and Morpho at 25.5%, USDtb at 10.8%, and other liquid stables at 16.4%. An evolution of these allocations over the first two months of 2026 can be seen in the breakdown below.

On the delta-neutral basis trade component of the backing, significant allocations include $935M in BTC and $454M in ETH. The majority of delta-neutral positions have consistently been held on Binance, approximately 64%, with OKX as the second-largest venue at 19%, followed by Deribit and Bybit, as shown in the chart below.

Source: Blockworks Ethena Dashboard, USDe (Risk), February 27th, 2026

Source: Blockworks Ethena Dashboard, USDe (Risk), February 27th, 2026

Source: Blockworks Ethena Dashboard, USDe (Risk), February 27th, 2026

Source: Blockworks Ethena Dashboard, USDe (Risk), February 27th, 2026

Source: Blockworks Ethena Dashboard, USDe (Risk), February 27th, 2026

Ecosystem Expansion & Integrations

February’s ecosystem highlights:

Felix Protocol on Hyperliquid launched the first USDe-USDH perpetual.

Ethena’s white label stablecoins crossed $100M in total circulating supply for the first time across jupUSD, USDm, and suiUSDe collectively. USDM first launched on MegaETH at the beginning of the month, marking the second protocol to build on the Ethena Whitelabel product. suiUSDe then went live, being the third protocol to build on Ethena Whitelabel.

The ability to mint & redeem USDe went live on HTX Global, along with daily rewards to incentivize USDe holdings. As seen during periods of market stress, direct mint and redeem access at exchanges strengthens USDe’s peg, making this a meaningful integration.

USDe supply on USDe-native perps has crossed $150m, as Ethereal and HyENA continue scaling USDe-margined trading.

January also had highlights worth noting:

USDe was listed on Upbit and Bithumb, South Korea’s largest exchanges.

Ethena partnered with Safe to accelerate USDe adoption on multisig wallets.

JupUSD launched on Solana as the first Ethena Whitelabel stablecoin to go live.

USDe was listed on LBank as a spot pair and earn product.

USDe expanded to HTX Global.

Ethena onboarded Kraken as a custody partner for USDe backing assets. Kraken is now a supporting custodian for USDe backing assets, joining Anchorage Digital Bank Copper and Ceffu.

Collateral & DeFi Footprint

Ethena’s assets continue to serve as a major collateral type across lending markets.
Ethena assets are actively used as collateral on Aave Core:

USDe: $1.076B supplied

sUSDe: $1.001B supplied.

PT sUSDe May 2026: $385.5M supplied.

Source: Blockworks Ethena Dashboard, DeFi Footprint, Mar 3rd, 2026

Pendle Markets:
Yield trading remains a strong use case, with significant TVL across multiple maturities, albeit significantly diminished in February. The main current market on Ethereum is sUSDe 06 May 2026 with $434.76M TVL.

Source: Blockworks Ethena Dashboard, DeFi Footprint, Mar 3rd, 2026

USDe related markets on Morpho have been increasing lately, led by sUSDe with $134.2M on Ethereum.

Source: Blockworks Ethena Dashboard, DeFi Footprint, Mar 3rd, 2026

Governance Activity

February marked the start of the fourth term of the Ethena Risk Committee. The Committee has been reduced from five to three members, in addition to Ethena Labs continuing as a non-voting member. The new Committee is comprised of Kairos Research, Blockworks Advisory, and LlamaRisk.

During the month, the Risk Committee worked on a new framework for reducing the sUSDe unstaking cooldown period, analyzed various new potential backing asset types for USDe, and more. As the quantitative work wraps up, findings will be shared with the broader community.

Monthly Revenue

Monthly protocol revenue remained relatively stable over the last few months, with January leading at $29.8M, slightly ahead of December’s $24.8M, before easing to $21.2M in February, reflecting softer broader market conditions. The bulk of revenue derives from USDe fees, with interest income from USDtb contributing a smaller share.

Within USDe fees, mint fees represent a negligible portion at roughly 1% of the total, with yield-generating activities (funding rates, staking yield, liquid stables yield) accounting for the remainder.

The allocation of USDe fees held broadly steady in January and February: approximately 54.6% was directed to sUSDe yield, 27.9% to partner rewards, and 17.5% to the Aave liquid leverage program.

Source: Blockworks Ethena Dashboard, Financials, Mar 6th, 2026

Source: Blockworks Ethena Dashboard, Financials, Mar 6th, 2026

Source: Blockworks Ethena Dashboard, Financials, Mar 6th, 2026