Ethena (USDe / sUSDe & ENA)
Scope: USDe/sUSDe mechanism, reward sources, mint/redeem controls, reserve fund, and ENA governance.
Mechanism (snapshot)
- USDe: delta-hedged synthetic dollar backed by spot BTC/ETH (and governance-approved assets) hedged via perps/futures; protocol may also hold liquid stables.
- sUSDe: stake USDe to earn protocol rewards; primary source is derivatives funding/basis from short perp positions; rewards flow into the staking contract over time.
- Mint/Redeem: direct access requires KYC/KYB whitelisting; order validity checks include oracle tolerance and per-block capacity limits; policy knobs include delta-limits and venue selection.
- Risk buffer: a Reserve Fund covers periods of negative funding and can act as bidder of last resort for USDe.
- Governance: ENA token governance with committees (e.g., Risk Committee) elected by tokenholders.
Scoring (tokenomics framework)
| Section | Item | Score | Rationale |
| 1. Business–Token (max 3) | Improves product? | 1 | Tokens underpin staking (sUSDe) and governance. |
| Essential vs optional | 1 | USDe/sUSDe/ENA are core to operation and policy. | |
| Real (fiat) value creation | 1 | Funding/basis + asset yields are exogenous cash flows. | |
| Subtotal | 3 / 3 | ||
| 2. Structural (max 10.5) | Influx of real value | 0 | Real fees exist (rubric assigns 0 when ‘Yes’). |
| Retention vs sell pressure | 1 | sUSDe staking retains value in-protocol. | |
| Ponzi-like? | 1 | Rewards funded by market flows, not pure emissions. | |
| Value generation | 1 | Delta-neutral synthetic dollar + savings asset. | |
| Critical mass dependence | 0.5 | Benefits from scale but not strictly required. | |
| Speculative incentives | 0 | No structural reliance on speculation. | |
| Controllable factors | 1 | Whitelists, limits, venues, and assets are tunable. | |
| Demand levers | 1 | Listings/venues/governance approvals. | |
| Real vs speculative demand | 1 | Payments/savings usage is real demand. | |
| Majority takeover possible? | -1 | Token-elected committees can be whale-influenced. | |
| Sticky voting points? | 1 | No stickiness. | |
| Empirical proof | 2 | Live system with measured rewards and ops history. | |
| Subtotal | 8.5 / 10.5 | ||
| 3. Allocation & Distribution (max 1) | Pump-and-dump prone? | 0 | Not a P&D structure (stable + staked). |
| Excessive concentration? | 0 | No evidence of extreme skew (monitor). | |
| Sell pressure avoided? | 1 | Staking sink; no heavy emissions. | |
| Subtotal | 1 / 1 | ||
| 4. Stability & Stress (max 4) | Shock resilience | +1 | Hedging + Reserve Fund buffer shocks. |
| Appreciation under stress | — | Ignored for pegged tokens. | |
| Feedback loops leading to crash? | +1 | Controls (limits, gatekeeper) reduce reflexivity. | |
| Subtotal | +2 / 4 | ||
| TOTAL | 14.5 / 18.5 → AA (Very strong) |
Strengths
- Clear exogenous revenue (funding/basis, asset yields) and a staking sink (sUSDe).
- Robust mint/redeem controls (whitelisting, oracle checks, per-block limits).
- Reserve Fund and gatekeeper roles provide shock absorption.
Key risks
- Funding rate regime shifts (sustained negatives) stress revenues despite the buffer.
- Governance capture via committee elections if ownership concentrates.
Recommendations
- Publish a negative-funding stress dashboard (duration × magnitude) with Reserve-Fund coverage bands.
- Expand live policy-knob transparency (delta-limits, per-block caps, venue switches) with mirrored dashboards.
- Strengthen anti-capture measures (committee election disclosures; quorum/term limits).
Audit #2 — EigenLayer (Restaking / EIGEN)
Scope: Restaking model (ETH/LST/EIGEN), AVS rewards path, slashing design, programmatic incentives, and governance.
Mechanism (snapshot)
- Restaking (liquid & native): deposit LSTs/ETH/EIGEN or re-point validator withdrawals to EigenLayer contracts to secure Actively Validated Services (AVS).
- Rewards path: AVSs distribute token rewards via a coordinator (Merkle-proof claims); EigenLayer adds programmatic EIGEN incentives (≥4% of supply in year one) to bootstrap reward flows.
- Slashing: AVSs can define slashing—objective or intersubjective. EIGEN is designed for intersubjective faults (fork-and-slash concept);
Scoring (tokenomics framework)
| Section | Item | Score | Rationale |
| 1. Business–Token (max 3) | Improves product? | 1 | Tokenized security market needs staking/lockups. |
| Essential vs optional | 1 | EIGEN/bEIGEN and restaked assets are intrinsic. | |
| Real (fiat) value creation | 1 | AVSs pay rewards for security; value transfers to operators/restakers. | |
| Subtotal | 3 / 3 | ||
| 2. Structural (max 10.5) | Influx of real value | 0 | AVS rewards exist (rubric assigns 0 when ‘Yes’). |
| Retention vs sell pressure | 1 | bEIGEN/locking dynamics favor retention. | |
| Ponzi-like? | 1 | Rewards sourced from AVSs; not pure emissions. | |
| Value generation | 1 | Shared security expands AVS design space. | |
| Critical mass dependence | 0 | Materially aided by scale—marked dependent. | |
| Speculative incentives | -1 | Early programmatic EIGEN incentives are speculative drivers. | |
| Controllable factors | 1 | Incentive schedules and AVS integrations are tunable. | |
| Demand levers | 1 | Rewards MVP + incentive boosts + AVS onboarding. | |
| Real vs speculative demand | 1 | AVS rewards now flow on-chain; demand not purely speculative. | |
| Majority takeover possible? | -1 | Governance capture risk while policy hardens. | |
| Sticky voting points? | 1 | No ve-style stickiness. | |
| Empirical proof | 2 | Live AVS (e.g., EigenDA) and rewards MVP. | |
| Subtotal | 7 / 10.5 | ||
| 3. Allocation & Distribution (max 1) | Pump-and-dump prone? | 0 | Not structured as P&D. |
| Excessive concentration? | -1 | Early distribution/operator power concentration risk. | |
| Sell pressure avoided? | 1 | Staking/bEIGEN reduce immediate float. | |
| Subtotal | 0 / 1 | ||
| 4. Stability & Stress (max 4) | Shock resilience | +1 | Operator/AVS segmentation + ‘unique security’ design. |
| Appreciation under stress | -2 | Governance/work tokens rarely appreciate in stress. | |
| Feedback loops leading to crash? | +1 | AVS-level slashing and unique-security limit spillovers. | |
| Subtotal | 0 / 4 | ||
| TOTAL | 10.0 / 18.5 → BBB (Moderate) |
Strengths
- Clear value proposition: pooled/programmable security for AVSs; growing on-chain rewards rails.
- Flexible slashing design enabling objective and intersubjective pathways.
Key risks
- Incentive reflexivity while programmatic emissions are prominent; governance capture risk during policy evolution.
- Operational concentration (large operators; AVS dependency) and correlated slashing scenarios.
Recommendations
- Disclose operator/AVS concentration dashboards (share of restake, cross-AVS overlap) with red-flag thresholds.
- Codify slashing legibility: standardized on-chain metadata and appeals process for intersubjective events.
- Taper programmatic emissions against measurable AVS-native rewards to avoid speculative dominance.
