Ethena expands USDe backing strategy into bStocks and equity perpetuals on Binance

Ethena (ENA) is adding tokenized U.S. equities and equity perpetual futures on Binance to the basis trade underlying its USDe (USDe) synthetic dollar backing allocation, extending the strategy into equities.

According to a statement shared exclusively with The Block, Ethena will use bStocks as tokenized spot collateral and Binance equity perpetuals for the hedge. The Ethena Risk Committee previously approved a framework for adding tokenized equity basis trades to its allocation strategy. bStocks represent an interest in securities held by their issuer, BTech Holdings Limited, and can be converted to the underlying securities on Binance, subject to applicable laws.

Ethena has previously run the delta-neutral strategy across crypto assets, using derivatives positions to hedge the exposure. Binance added USDe across its platform last year, including as collateral for futures and perpetuals trading. 

Over time, Ethena said it expects the equity perpetual opportunity to significantly exceed the crypto perpetual market.

"This is the most significant expansion of USDe's funding mechanism since we started," Ethena Labs founder Guy Young said. "Equities trade in the hundreds of trillions of dollars globally, and as more of that market moves onchain, we see a substantial opportunity to continue diversifying our backing strategy."

USDe supply currently stands at about $4.9 billion, according to The Block's data dashboard.

Equity markets enter Ethena's basis trade

Binance has more than $2.9 billion in open interest across equity perpetual futures, according to data provided by Ethena, growing at a compound monthly rate of 105% this year, while the equity basis has averaged 3.56% annualized over the past six months.

"Binance's bStocks and equity perpetuals are seeing increased adoption as their liquidity and use case grows," Binance Head of Exchange and Trading Shunyet Jan said. "Ethena runs one of the largest systematic strategies in digital assets, and their expansion into tokenized securities and equity perps is a clear sign of how the convergence of crypto and traditional assets will surface new opportunities." 

Binance previously opened trading in more than 7,000 U.S.-listed stocks and ETFs to eligible users outside the U.S. in June. It subsequently rolled out bStocks later the same month. Binance's TradFi perpetual futures generated about $433.4 billion in volume in August, with equity-linked contracts accounting for roughly $342.9 billion, The Block previously reported.