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. The reserve fund is structurally undersized, and governance incentives point toward keeping it that way. 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 $6.1B in deposits and raised $156M in funding. Its $62M reserve fund covers less than 1% of the circulating USDe supply — and under the protocol's own stress test, depletes in 33 days during a moderately bearish market. The pending ENA fee switch creates a governance 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 massive 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, $8B fled the protocol in weeks. The $62M reserve fund lasts just 33 days under the protocol's own stress model — not a worst case, just a moderately bearish quarter (2) The pending fee switch sends 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 $3.25 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.