Ethena

Ethena receives a C risk grade (49/100) from Hindenrank, where lower scores indicate lower risk. Moderate risk — novel at scale with real stress-test scars from October 2025 depeg. The reserve fund coverage ratio improved as supply contracted, but governance incentives point toward keeping it undersized as the fee switch moves to a live vote. A synthetic dollar protocol that earns yield by holding staked crypto and betting against it with short futures positions across five centralized exchanges. It manages ~$4.4B in circulating USDe and raised $156M in funding. Its $62M reserve fund covers roughly 1.4% of the USDe supply — and under the protocol's own V1 stress test, depletes in ~52 days during a moderately bearish market. The ENA fee switch remains pending a Q2 2026 governance vote, creating a conflict where token holders who receive diverted revenue also vote on how much insurance to keep. Its C grade reflects the fragile dependency on positive funding rates, undersized insurance, and exchange concentration risk at scale.

The key risks identified for Ethena are: (1) The entire system depends on trading fees staying positive. When they flipped negative in October 2025, USDe supply fell from $14.8B to ~$3.8B over months. The $62M reserve fund lasts ~60 days at -10% annualized funding on the current supply — not a worst case, just a moderately bearish quarter (2) The ENA fee switch has been formally approved for a Q2 2026 governance vote — it would send protocol revenue to ENA token holders instead of building the insurance fund. The same token holders vote on how big the insurance fund should be. They conveniently changed the risk model to make the current fund look 'oversized' (3) Half the protocol's short positions sit on Binance. If Binance halts futures trading for any reason, Ethena has to re-hedge roughly $2.2 billion across smaller exchanges — the slippage alone could exceed the entire reserve fund (4) Your deposits are held by third-party custodians (Copper, Ceffu) off-chain. The Bybit hack proved this works against exchange failure, but if a custodian itself goes bankrupt, your money could be frozen for months or years

Ethena scores 49/100 across eight risk dimensions: Mechanism Novelty: 8/15, Interaction Severity: 13/20, Oracle Surface: 3/10, Documentation Gaps: 2/10, Track Record: 5/15, Scale Exposure: 7/10, Regulatory Risk: 3/10, Vitality Risk: 8/10. The highest risk area is Vitality Risk at 8/10.

Among 29 rated Stablecoin protocols on Hindenrank, Ethena ranks #23 by safety (lowest risk score = safest). Its 49/100 risk score and C grade place it among the riskier Stablecoin protocols.

Ethena scores 5/15 on the Track Record risk dimension, indicating some history of security incidents or exploits. Higher scores reflect more severe or frequent incidents. Review the full risk report for details.