The state of Ethena, USDe, and ethereum:0x57e114b691db790c35207b2e685d4a43181e6061

I'd call @ethena in the "Upgrading" stage.
Been a while since the new USDe model announcement, so decided to write a deep dive with personal thought:
Let's start with sUSDe yield.
The current sUSDe APY is 4.5%. This is better than average APR during Q1-Q2 around 3.5% and will start to get more attention if it enters the 5-7% range.
The source of yield has now improved. They've made a right decision pivoting away from crypto basis trades which only generates 0.6% APY (well we're living in a bear so crypto funding rate arb is dead).
I think the team focus is trying to allocate more from "Liquid Stables" (basically T-Bills + idle for redemption) into RWA portion. Ethena recently partnered with @centrifuge and allocated $250M into Centrifuge's tokenized JAAA fund which generates yield from institutional credit.
Their key focus next is to allocate more and increase APY for sUSDe.
There are several options I can think of:
1. Centrifuge has another higher yield option (8.18% APY) which is tokenized Apollo's corporate credit fund. Allocating capital from "Liquid Stables" into this will make capital more efficient and generate higher APR.
2. Basis trading on CME market. There are still some RWA assets that they can do basis trading and generate more yields. This is an interesting area to explore too.
Lastly, the current state of Ethena
ENA is in the low range at the time of writing. I won't call this the bottom but it's worth putting it back into your watchlist.
The sequence of ENA flywheel is simple:
> (Done) Introduce new model
> (In progress) Building robust RWA yield infra
> Add incentives into sUSDe
> More TVL, more attention
> People back on bullish ENA
Still long way to validate and see. But the best time to entry is where you read between the news headline and create your own thesis.
NFA. DYOR.