Comprehensive analysis of Ethena’s second season points strategy! How to increase APY above 1100%

Ethena, the fastest-growing stablecoin project in recent times, updated the points (sats) bonus measures on May 4th to encourage the YT-ENA price (Implied APY) on Pendle to increase from 64% once soared to 82%, and was temporarily reported at 80% before the deadline, which shows how much the market is paying for this additional measure.

The latest point bonus measure is: users lock $ENA and can obtain 20% to 100% point bonus based on the amount of locked $ENA relative to their USDe holdings. For example, assuming you have locked $1,000 in USDe, if you lock another $200 in $ENA, you can get a 20% bonus, that is, you can get 36sats for every 1USDe per day (original 30sats multiplied by 1.2); if you lock the same amount $ENA can get up to 60x points!

In the following, we will refer to former Bankless analysts Donovan Choy and Thor's "Comprehensive Guide to Ethena Season 2" to analyze four different Ethena investment strategies and their potential returns for interested readers. Research preparation does not constitute investment advice.

When estimating the potential returns of each strategy, we must first estimate how many sats will be distributed in total after the second quarter event ends on September 2, so as to estimate our airdrop allocation and decide which strategy can provide Best reward. According to Ethena’s official website, 1.76 trillion sats have been issued so far. Without taking into account the sats issued by USDe or ENA on the CEX wallet, according to the Choy and Thor method, it is estimated that the size of sats will reach approximately 10 trillion by the end of the second quarter event. .

In addition, we also assume that ENA’s FDV will reach US$20 billion (currently nearly US$13.8 billion), and that the airdrop allocation in the second quarter will be the same as in the first quarter, both at 5%, which means The value of the airdrop will reach $1 billion.

Estimated points scale at the end of the second quarter

Hold and lock USDe

If you only hold and provide liquidity lock USDe, you can get 20sats for every 1USDe every day, and you will eventually get 0.00051% airdrop allocation, which is an income of 5,117 US dollars, which will be an investment return rate of 25.59% (or an annualized rate of return of 72.45%).

The following table does not take into account the additional 20% points bonus that can be obtained by using OKX, Binance, Bybit and Bitget Web3 wallets. Therefore, if you want to adopt this strategy, you may as well use the above CEX wallet to lock USDe and you will be able to get Higher returns.

Invest in Pendle YT-USDe

Following the previous article, taking the liquidity re-pledge protocol Renzo as an example, we will introduce the trial calculation method of the return rate of investing in Pendle YT Finally, the same concept applies to investing in other YT products. Pendle has USDe markets in Ethereum (expires on 7/29), Arbitrum (expires on 8/29) and Mantle (expires on 7/29), and you can also get 20sats per 1USDe every day. The following table compares the return rate of investing in YT-USDe on these three chains. It can be observed that the APY of each chain is significantly ahead of the first strategy by 78.7%. In particular, the Ethereum mainnet has the highest return rate of US$20,000. At the cost, the airdrop profit can reach US$50,469, with a return rate as high as 468.56%.

It is worth noting that Mantle also enjoys an additional 0.019 EigenLayer points for every 1USDe due to its Mantle Rewards Station plan. This is an additional benefit not taken into account in the table below.

##Invest in YT-ENA

Next, you can also invest in Pendle’s ENA market, which is only deployed on the Ethereum mainnet. Each ENA can be used every day. Obtain 30sats. Under the effect of YT leverage points, it is estimated that you will eventually receive an airdrop allocation of 0.00434%, with a profit of up to $23,353 and an APY of 353.19%. Pendle interns made similar estimates today.

Although it is not as good as the annualized return of over 400% from investing in YT-USDe, it is suitable for investors who are optimistic about ENA but do not want to bear the risk of USDe decoupling.

Invest in YT-ENA YT-USDe

Finally, let’s look at the strategy in line with the latest points bonus measures. The strategy allocates 50% of the capital between investing in YT-ENA and YT-USDe, which means that you can get 100% of the points bonus on the USDe position, that is, you can get 60sats per 1USDe per day (it is not yet clear where ENA Whether the position can also receive bonuses, the table below conservatively estimates that there is no).

As you can see, this strategy on Arbitrum had the highest returns, with a profit of $73,391 and an APY of 1136%. This higher reward is commensurate with the higher risk traders take on by having to lock ENA.

This article explores Ethena’s four strategies for the second quarter through detailed calculation of return rates. On the one hand, it provides readers with a comprehensive guide to participate in the Ethena second quarter point activity, and on the other hand, it enhances investors’ confidence and decision-making in investing in YT. Base. In addition, the Excel spreadsheet of Choy and Thor is also attached. Interested readers can modify the relevant assumptions after copying it as in this article.

It should be noted that under the new points bonus measure, the inflation of points may be more serious, which may dilute the airdrop allocation obtained by the above strategy. In addition, on-chain operating costs and ENA price performance are also key considerations.

Today, Ethereum L2 Mode also announced that USDe and sUSDe will be introduced in the second quarter point activity. Readers who are interested in Ethena can pay attention to it, and there may also be potential investment opportunities.

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