Ethena is extending the yield-generation model underpinning its USDe synthetic dollar to tokenized equity markets. With Binance as its first platform, the protocol combines tokenized U.S. stocks held on the spot market with short positions in equity perpetual contracts in an effort to neutralize directional exposure and capture returns from funding rates and price differentials.
Ethena is taking another step in the development of its business model. The protocol, known for applying a delta-neutral basis-trading strategy to bitcoin, ether and other cryptoassets, is beginning to use tokenized U.S. equities as a new component of the hedging strategy supporting USDe.
Binance is the first platform selected for this expansion, through its bStocks products and equity perpetual contracts.
The mechanism is based on two complementary positions. Ethena holds bStocks, representing tokenized exposure to U.S. equities, while simultaneously opening a short position in the corresponding perpetual contract denominated in USDT.
The objective is to offset most of the impact of changes in the underlying stock price between the spot and derivatives positions. The strategy therefore seeks to reduce directional exposure while generating returns from funding rates and differences between spot and derivatives markets.
A New Source of Yield for USDe
The structure replicates a principle already used by Ethena in crypto markets. When an investor holds the underlying asset while simultaneously shorting the corresponding derivative, exposure to the asset’s price movements can be substantially reduced.
The targeted return can then come primarily from funding rates, basis spreads and market conditions.
The diversification comes as funding rates in crypto perpetual markets have declined. According to Ethena’s data, the annualized funding rate for bitcoin, weighted by open interest, fell from an average of 11% in 2024 to 4.9% in 2025 and approximately 2.2% in 2026 through August 11.
Tokenized equity markets could therefore provide Ethena with an additional source of potential yield.
The equity perpetual market on Binance is already showing significant activity. Ethena says it has more than $2.9 billion in open interest, with compound monthly growth of 105% since the beginning of the year.
However, the yield differential is not guaranteed. Data reviewed by Ethena’s risk committee showed that basis-trading returns on eligible equities also declined during the summer, falling from approximately 18% annualized at the end of July to around 7% at the end of August for the securities under review.
Traditional Equities Enter Crypto Infrastructure
The strategic significance of the initiative therefore goes beyond yield diversification. Ethena is seeking to significantly expand the universe of assets that can participate in the USDe backing strategy.
According to Ethena, the potential addressable market could increase from approximately $2.5 trillion for cryptoassets to more than $150 trillion for real-world assets. The estimate reflects the depth of traditional financial markets and the growing representation of these assets on blockchain-based infrastructure.
bStocks are a key component of this structure. They do not simply represent native shares issued directly on a blockchain. Instead, they represent an interest in securities held by BTech Holdings Limited, a Binance-affiliated entity, with conversion into the underlying securities subject to applicable jurisdictions and conditions.
This structure introduces a specific risk that differs from direct ownership of shares. Ethena’s risk committee had identified exposure to the issuer as a factor requiring additional contractual safeguards before larger allocations could be made.
Ethena has therefore established selection criteria for assets that may be included in the strategy, including sufficient liquidity, a funding-rate history of at least 30 days and minimum open-interest levels. Leveraged and inverse products are excluded from the strategy under review.
The initiative marks an important evolution in the USDe model. The protocol is no longer relying exclusively on crypto markets to seek the returns supporting its ecosystem. Tokenized equities now allow a hedging mechanism derived from crypto markets to be applied to assets traditionally traded on financial markets.
For Binance, the initiative further connects its crypto activities with traditional finance. For Ethena, it opens a new asset class that can complement its existing strategies.
The initial amount allocated to the new strategy and the precise allocation among individual equities have not been publicly disclosed.
The next challenge will be to assess the depth of this new source of yield, its stability under changing market conditions and the risks associated with the custody and structure of tokenized assets.
The initiative represents another chapter in the convergence of equity markets, derivatives and blockchain infrastructure, with USDe positioned at the center of this evolving financial model.
