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Most DeFi founders talk about bringing crypto to the masses. Guy Young decided to just build the bank.
Ethena Pay, a self-custodial neobank app built exclusively on the Avalanche blockchain, went live on September 1. The app lets users hold balances in USDe, Ethena’s synthetic dollar, while earning up to 6% APY. Users can spend those balances through a Visa card with cashback ranging from 4-5% at baseline, scaling up to 10% at select merchants. The cashback is paid in AVAX.
From delta-neutral trades to debit cards
Young spent nearly a decade in traditional finance, including roughly six years at Cerberus Capital Management, before founding Ethena Labs in March 2023. The original thesis behind Ethena centered on USDe, a synthetic dollar maintained through delta-neutral strategies. Think of it as holding a crypto asset while simultaneously shorting it, so the value stays pegged regardless of which direction the market moves.
That strategy worked well enough to push USDe’s circulating supply past $14B in October 2025. Then came the cooldown. By late August 2026, the supply had contracted to an estimated $4-6B. Rather than waiting for DeFi’s total value locked to revisit its old highs, Young pivoted toward consumer finance.
Ethena Pay launched in approximately 48-50 countries on iOS, beginning with a beta phase of around 400 users. The initial rollout excludes the US due to regulatory considerations, though plans to expand into the US, UK, and EU were described as weeks away at launch. Android compatibility, multi-currency accounts, and broader geographic coverage are also on the roadmap.
Seven-figure deposits landed within the first two weeks, and the platform has historically processed over $30B in mint and redeem flows across its ecosystem.
Why a neobank instead of another protocol
Stablecoins like USDC and USDT generate enormous yield for their issuers, Circle and Tether respectively, by parking reserves in Treasury bills and similar instruments. The users holding those stablecoins get zero percent of that yield. Young’s bet is that users will prefer a synthetic dollar that passes yield back to them. A 6% APY on a dollar-denominated balance, combined with meaningful cashback on spending, is a value proposition that most traditional banks and even most fintech neobanks can’t match.
The tiered rewards structure adds a loyalty mechanic. Pro and VIP cashback levels require users to either lock ENA, Ethena’s governance token, or bring in referrals.
The backing question
Ethena has begun incorporating real-world asset lending into USDe’s backing, moving beyond its original delta-neutral strategies. The original approach carried risks tied to funding rate volatility and exchange counterparty exposure. Those funding rates — the periodic payments between long and short traders on perpetual futures — can swing negative during prolonged downturns, eroding the yield that makes USDe attractive.
What this means for the competitive landscape
Ethena Pay enters a space occupied by crypto debit cards from Coinbase and Crypto.com, as well as fintech neobanks like Revolut and Nubank that have added crypto features. Ethena Pay’s architecture, built on Avalanche, keeps user funds in their own custody while still enabling fiat-denominated spending. The AVAX-denominated cashback creates a natural demand loop for the network’s native token.
The US exclusion at launch isn’t a choice, it’s a necessity. Whether Ethena can navigate the compliance landscape fast enough to reach its most lucrative potential markets will likely determine whether this becomes a footnote or a turning point.
Disclosure: This article was edited by Editorial Team. For more information on how we create and review content, see our Editorial Policy.
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