Ethena and FalconX have set up a $1 billion secured warehouse facility that will deploy assets backing the USDe synthetic dollar into overcollateralized institutional loans. The companies announced the arrangement in a Aug. 19 release.
The facility gives Ethena a source of returns beyond the crypto basis trade that underpins USDe, whose yields can compress when perpetual-futures funding rates weaken.
How the facility works
Loans will be made through a bankruptcy-remote special purpose vehicle, with FalconX originating and servicing the credit and managing collateral held at qualified third-party custodians. Ethena holds a first-priority security interest over the vehicle’s assets, and the loans are structured to be overcollateralized.
FalconX said the financing can support institutional trading strategies, corporate treasury management and payments. Neither company disclosed loan terms, expected returns or how much capital has been deployed initially.
Diversifying USDe returns
Ethena Labs founder Guy Young described secured institutional lending as a large and durable source of return that onchain capital has barely accessed. “Partnering with FalconX gives us a secured, overcollateralized channel into institutional credit,” Young said, according to the announcement.
The companies described the facility as one of the largest deployments of onchain capital into secured institutional credit to date.
