Dragonfly Capital leads $6 million seed funding round for Ethereum stablecoin developer Ethena: Axios

Deals • July 17, 2023, 11:19AM EDT
Partner offers
The Block may may earn a commission if you use our partner offers, at no extra cost to you.

Quick Take

  • Ethena is developing an ethereum-backed stablecoin called USDe.
  • The firm created USDe after the Terra ecosystem collapse of 2022.

The web3 venture firm Dragonfly Capital led a $6 million seed funding round for Ethena, a startup building Ethereum-backed stablecoins. 

Ethena's other funders include Deribit, Bybit, OKX, Gemini, Huobi and BitMEX founder Arthur Hayes, according to Axios. 

Ethena maintains the peg for its USDe stablecoin by using collateral from users to short ether using perpetual swaps and hedge price exposure. The company has also created a savings bond which uses staked ETH and swap margins to generate yield. 

"In crypto, you're trying to create a parallel financial system, but the most important financial instrument in the entire space (the stablecoin) is still completely tethered to the existing system," Ethena founder Guy Young told Axios. "We're trying to create something that exists outside of the banking system."

Ethena's next move is to finish its testnet phase sometime in the third quarter, launching its USDe stablecoin and savings bond after completion. 


© 2025 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

AUTHOR

MK Manoylov profile picture MK Manoylov

MK Manoylov is a former reporter at The Block.

See More

Editor

To contact the editor of this story: Nathan Crooks at [email protected]

WHO WE ARE

The Block is a news provider that strives to be the first and final word on digital assets news, research, and data.

+ Follow us on Google News
Connect with the block on

More by MK Manoylov