Ethena Targets RWA Equity Perps to Scale USDe Yield Beyond Cyclical Crypto Basis Trades

Ethena's yield product, USDe, is set to receive an expanded collateral backing through basis trades on equity perpetuals (perps).

According to the project, equity perps — also known as RWA (real-world asset) tokenization perps — have grown 10x to $6 billion in Open Interest since March. The project added that the RWA perps market could grow 100x larger, offering a scalable basis yield opportunity that is not tied to the cyclical crypto market.

Ethena noted that the underlying asset base exceeds $150 trillion, compared with roughly $2.5 trillion for crypto, making this the most scalable extension of the basis allocation to date. The protocol expects RWA perps to eclipse crypto allocations in USDe's backing within 12–24 months.

Currently, the largest share of USDe's collateral backing (32%) is held in liquid stablecoins such as USDT and USDC. DeFi lending is the second-largest reserve category, accounting for 31% across Aave and Morpho.

Ethena's aggressive USDe diversification

A basis trade involves locking in a spread between the spot price of an asset and its futures contract — in this case, perpetuals. However, the strategy only works during a bull market. At the height of the 2024–2025 bull run, USDe's market supply peaked at nearly $15 billion with yields above 80%. During the subsequent crypto winter, supply contracted to $4 billion and yield slipped below 0%.

That volatility laid bare the structural problem the diversification push is meant to solve: a yield product whose returns collapse precisely when crypto markets — and often its holders' portfolios — are under pressure. Anchoring more of USDe's backing to assets outside crypto is intended to make its yield profile less dependent on a single market cycle.

To diversify away from the cyclical crypto market, the project began with traditional credit, powered by Janus Henderson. That category currently accounts for 12% of USDe's backing.

The latest RWA perps plan, set to be deployed in the coming weeks, marks the second wave of diversification.

Asked why Ethena delayed expanding USDe into RWA perps, founder Guy Young said: "We took a cautious approach to what was a nascent market and waited until we saw deep, liquid markets with a data history we could study before moving into the opportunity at scale."

Young added that the segment is "one of the very few 100x left" and could surpass global crypto's volume and Open Interest (OI) within 24 months.

Compared with its main yield rival, short-term U.S. Treasury bonds, USDe offered a 1.6% spread — meaning holders could expect more yield from USDe than U.S. T-bills, before factoring in DeFi security risks.

For USDe holders, the shift also carries new considerations: equity-linked derivatives introduce exposure to different market dynamics and counterparty venues than the crypto basis trades the protocol was built on, and how reserve composition evolves remains to be tracked.

Ethena has been aggressively upgrading its ecosystem ahead of the next bull run. Whether this round of yield diversification will boost demand for USDe remains to be seen.

Source: AMBCrypto