Season 2: The Sats Campaign

April 2nd marks one of the biggest days in Ethena’s recent history. Not just because of the ENA airdrop, but also because it marks the beginning of the second Ethena campaign.

“Shards” have been replaced with “Sats” in this campaign to coincide with one of the protocol’s most exciting product developments to date - onboarding BTC as a backing asset.

BTC perpetual futures offer Ethena an additional ~$25bn of open interest to delta-hedge, a 2.5x increase on the current size of ETH perpetual futures. This figure excludes $11bn of CME open interest.

Average funding on BTC has consistently matched ETH funding rates and presents one of the largest untapped real yield opportunities in all of crypto.

YTD funding on BTC has averaged ~22% on ~$25bn of open interest on major exchanges.

With half of that open interest paying fees to shorts, this equates to ~$2.75b of annual gross cash flow opportunity.

After adding over 1 billion of supply in a month, Ethena delta hedging represents approximately 15% of ETH open interest.

While no material impact on ETH funding rates has been observed as of yet, with funding currently sitting at ~60% at the time of writing, it is crucial that the protocol continues to have room to grow at the pace demanded by the market; accessing BTC perpetual futures is a huge unlock for the scalability of USDe.

The Sats Campaign aims to support that growth. The campaign will run for 5 months until September 2nd, or until USDe supply hits $5bn, whichever happens first.

Existing Season 1 Positions:

It is imperative that earliest users are rewarded, particularly those that contributed to the Ethena ecosystem in Season 1. With that in mind, Season 2 will have boosted rewards for early users, specifically:

A 20% boost in Sats earned for existing Season 1 positions in Season 2 when a user is:

a) not breaking any of the vesting conditions outlined in the recent post, or

b) adds any new USDe into the new incentive program on the same wallet

In short, if a user is locked into a Season 1 position and simply takes no action, they will be eligible for boosted rewards in Season 2, specifically:

• Lock USDe = 20x Sats per day vs 10x Shards

• LP Curve USDe = 25x Sats per day vs 15x Shards

• Deposit USDe on Morpho/ Gearbox/ Other = 20x Sats per day vs 10x Shards

New Rewards

A new season means new options for rewards, and those will include some new partnerships:

1. MakerDAO and Morpho

Last week, Morpho launched USDe and sUSDe/DAI pools with Maker allocating 100m of DAI liquidity via Spark to the pools as part of Maker’s Endgame plans involving Ethena.

That 100m was absorbed within a few hours, with users earning 7x shards on USDe collateral, and 5x on sUSDe collateral.

For Season 2, the Morpho caps will be increased, with Maker set to increase their capacity significantly, while users will earn the following for depositing collateral and borrowing:

• 20x sats on USDe collateral

• 5x sats on sUSDe collateral

The use of leverage is being actively monitored in an attempt to mitigate risk building up across DeFi in a short period of time. As a result, there will initially be a cap of $400m additional USDe rewards on Morpho taking the total to $500m.

Updates will be posted when users can begin depositing with the new caps on Morpho shortly to begin accruing these rewards.

Please review this thread before using any money markets or leveraged platforms.

2. Mantle, Pendle and EigenLayer Points

Mantle is another ecosystem Ethena is excited to integrate with, with plenty of options for Mantle users to earn Sats in Season 2.

One of the most popular Season 1 pools were Ethena’s Pendle pools, filling up the 250m cap in a matter of days. Season 2 will feature new Pendle pools on Mantle, enabling users to participate with lower gas fees than on ETH Mainnet and allowing users to trade USDe YT, PT or provide liquidity to pools to earn not only Sats, but also Eigenlayer points.

Details:

• 20x sats per USDe held in USDe YT or LP position

• 100m cap

• Eigenlayer points: 0.0012 EL per USDe per day

• Cap on Eigenlayer points will be 100m * 0.0012 * 115 days = 27,600,000 points

There will also be several other ways to earn sats in the Mantle ecosystems during Season 2:

• Acquire USDe on Mantle to earn 2x Sats on USDe, 1x Sats on sUSDe

• Merchant Moe: Provide liquidity and lock LP tokens to earn 20x Sats (20m total locked cap of which $10m is USDe)

• INIT: Use USDe Looping Hook on INIT to earn 20x Sats per USDe (20m cap)

• IntentX : Use USDe as collateral to earn 20x Sats per USDe (10m cap)

Ethena x Mantle integrations would not be possible without the following partners:

• RedStone and Pyth : Oracle Feed Providers for USDe / sUSDe

• Stargate : USDe / sUSDe Bridging Partner

• Native : RFQ Swaps for USDe / USDT

3. Additional Pendle Pools

As well as the new Mantle x Pendle pool mentioned above, the existing USDe Pendle pool on ETH L1 will be re-opened on April 2nd for users to roll into the new season with a 100m cap.

In addition, Ethena and Pendle will be collaborating to launch two more pools as part of Season 2 and we will follow up with more details on this in our next update.

This is just the start of Ethena’s integrations and partnerships for Sats rewards in Season 2, and users will be kept updated here as the campaign progresses.