Staking is controlled by the StakedUSDe smart contract. Stakers can interact with it directly or through the Ethena dApp UI.
When staking, a user transfers USDe into the contract and receives sUSDE (staked USDe), another ERC20 token that represents a fractional interest in the USDe in the contract.
Over time, a portion of protocol revenue accumulates in the staking contract as additional USDe is transferred in.
When unstaking, staked USDe is burned in exchange for a proportionate USDe amount.
Users will always receive the principal amount of USDe staked as well as their proportionate share of the deposited protocol yield upon unstaking.
The StakedUSDe smart contract implements the ERC4626 Token Vault standard for composability. This popular standard is widely used for onchain savings vehicles; thus, it is expected that other user interfaces beyond the Ethena dApp may likely support USDe staking in the future. Various deposit and redeem functions are exposed, enabling staking with or without a slippage threshold, and with or without an ERC2612 Permit signature authorizing the transfer of USDe.
There is no minimum staking period. If a user stakes and unstakes in consecutive blocks, they are entitled to their share of any increase in vested USDe value in the contract that has occurred in that ~12-second period. Because reward payments into the contract occur every 8 hours and linearly vest over 8 hours, there are never any sudden spikes in the vested USDe value, which prevents sandwich attacks where an informed staker stakes before and unstakes after payment at the expense of all other stakers.
Stakers cannot lose USDe by staking. USDe transfers of rewards can only be positive into the StakedUSDe contract. As such, the USDe value of stUSDe can only increase or stay flat over time.
Staking rewards accrual is a function of the protocol's generated yield from staking Ethereum & earning the funding and basis spread from the delta hedging derivatives position. While protocol generated yield should remain fairly stable unless there is a slashing event, the funding and basis spread yield from delta hedging derivatives will vary considerably (even day to day). In some periods, no yield may be paid to stakers if the funding + basis spread yield is negative and it is greater than or equal to the yield generated via the staked Ethereum. In this situation, when no protocol yield is transferred to the StakedUSDe smart contract, the Ethena insurance fund will ensure the underlying protocol collateral remains untouched.
Q: Do I have to stake USDe to be entitled to the generated yield?
Yes. You have to stake your USDe with Ethena to accrue generated yield.
Q: Why is there a cooldown period during launch?
There is a 7-day cooldown from requesting to unstake sUSDe to receiving USDe in return. Users must first request their USDe be unstaked wherein their USDe will be placed in a USDeSilo smart contract. Once the cooldown period has elapsed, users will be able to withdraw their USDe from the USDeSilo smart contract.
Q: Am I able to sell the sUSDe prior to the cooldown?
Yes, you are able to do so if external markets exist. Ethena Labs is not planning to actively procure or facilitate creation of any such markets.
Q: Is it possible that I owe the protocol funds?
No. The protocol's insurance fund will cover any periods wherein the protocol generated yield is not positive.
Q: What are staking rewards paid in?
The staking rewards are paid through an increase in value of sUSDe.