Sharlife is a Registered Shariah Advisory Firm with Securities Commission Malaysia - The only regulated provider of crypto & stocks Shariah status
Sharlife is a Registered Shariah Advisory Firm with Securities Commission Malaysia - The only regulated provider of crypto & stocks Shariah status
Ethena is a synthetic dollar protocol built on Ethereum that provides a crypto-native solution for money, USDe, alongside a globally accessible dollar savings asset, sUSDe.
Ethena's synthetic dollar, USDe, provides a crypto-native, scalable solution for money achieved by delta-hedging Bitcoin, Ethereum and Solana spot assets using perpetual and deliverable futures contracts, as well as holding liquid stables such as USDC and USDT.
sUSDe is the reward-accruing version of USDe. In order to receive rewards, users must stake their USDe to receive sUSDe.
Users deposit USDT to mint USDe. The deposit is transferred to OES providers and used to open/close short perpetual positions and deposit liquid stables.
Ethena generates yield from three different sources:
Currently around 3-4% from staked Ethereum backing USDe
Earnings from perpetual futures funding rates and basis on dated futures
Fixed rewards on liquid stablecoins in the reserve
Requires caution from a Shariah perspective
It is considered grey as it is backed by a mix of instruments, namely stablecoins (USDT and USDC), which appear to have no Shariah issues, and also by non-existent assets through perpetual trading. However, buyers of the token do not receive any returns from the perpetual trading unless they stake the token. Even then, it remains questionable due to the token being partially backed by assets that do not exist. Additionally, the staking rewards are deemed Shariah non-compliant, as they are generated through a non-compliant financial instrument.
Muslims should exercise caution when considering USDe. While it offers innovative features, its yield mechanisms raise Shariah concerns.
| Reserve Assets |
BTC Spot + Futures
ETH Spot + Futures
SOL Spot + Futures
USDC
USDT
Delta-hedging strategy using spot assets and futures contracts
|
|---|---|
| Yield Source | Staking, Futures, Stablecoins |
| Launched | 2023 |
| Founder | Guy Young |
Founded by Guy Young
Guy brings nearly a decade of experience in traditional finance, including roles in investment banking, hedge funds, and private equity. His tenure at Cerberus Capital Management, a $50 billion investment fund, and his leadership as Head of Principal Investments at a Cerberus affiliate add credibility to the Ethena project.
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