Ethena Pay launches Earn+ yield product on Avalanche

Ethena Pay has launched ‘Earn+’, a new yield-generating feature within its self-custodial payment application. The product aims for target returns of up to 12% annually on dollar deposits, a significant increase from the app’s standard balance rewards of approximately 6%.

The Earn+ mechanism utilizes an external vault structure managed by Upshift and curated by Steakhouse Financial. These funds are deployed via the Aave v4 lending market on the Avalanche network. The strategy involves a leveraged loop where Ethena’s synthetic dollar, USDe, is used as collateral to borrow USDT, which is then used to acquire more USDe. The target leverage for this strategy is approximately 11x.

While the product offers higher potential returns, it carries inherent risks. The 12% APY is a target and not a guaranteed rate. Users are subject to risks including smart contract vulnerabilities, market volatility, and borrowing costs. Additionally, technical assessments have noted that because the Aave v4 price reference for USDe on Avalanche follows USDT, the oracle might not immediately reflect a specific depeg of USDe against the dollar, potentially impacting collateral health visibility.