#BTC Ethena is an artificial US dollar stablecoin protocol, Ethena's synthetic USD coin will provide the first regulated, scalable and stable native crypto solution for funds realized through Delta's hedging guarantees.

Ethena is essentially an open-ended hedge fund that uses liquid ETH tokens as collateral to sell an equal amount of ETH to create a portfolio with delta 0, an allocation that ensures that the net worth of Ethena's holdings does not fluctuate with changes in the underlying value of its assets, while at the same time reaping a return from ETH storage and funding payments for its short positions.
To protect users' guarantees, Ethena (ENA) uses an over-the-counter (OES) settlement solution, where funds are held by a reputable third-party trustee and account balances are assigned only to CEXs to provide trading margin, ensuring that funds are not deposited on a centralized exchange.
Since ideally pegged ETH can be hedged with short positions with equivalent face value, USDe can be minted with a 1:1 collateral ratio, making Ethena (ENA) capital efficient on par with USD-backed stablecoins such as USDC and USDT, while also avoiding dependence on asset sources from traditional financial markets, where asset issuers are subject to the rules of the physical world.
While the current Ethena (ENA) model only uses pegged ETH as collateral, the protocol may use BTC as collateral for greater scaling, but doing so may mitigate USDe returns, as BTC collateral does not generate storage returns.