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FIGR_HELOC $1.03 Stablecoins · News brief
Ethena Pay's 11x Earn+ vault raises oracle and leverage risk
The new USDe-collateralized product advertises up to 12% APY, but its oracle setup may mask collateral losses, reports say.
Key takeaways
- Oracle gap. Aave Labs said the Avalanche USDe reference follows USDT and would miss a USDe-only depeg, so reported collateral health may not reflect the collateral's market discount.
- Leverage magnifies moves. In a hypothetical 11x position modeled by CryptoSlate, a USDe fall to $0.95 would cut equity by 55% before fees and costs, according to Blockonomi's report.
- Costs matter. Because debt equals ten times starting equity in that model, a 1% rise in annual USDT borrowing cost would reduce simple annual return on initial equity by about 10%, all else equal.
What happened
Ethena Pay launched Earn+ on Oct. 28, a vault product that advertises up to 12% APY and targets roughly 11 times leverage by pairing USDe collateral with USDT borrowing. CryptoSlate and Blockonomi reported that the vault is run externally by Upshift and Steakhouse through Aave v4 on Avalanche, while Ethena Pay supplies the user-facing app.
The central concern is the price reference used by the lending market. In an Oct. 20 technical assessment, Aave Labs said the Avalanche USDe feed follows USDT and would not capture a USDe-specific drop. The setup uses a Chainlink USDT/USD feed and an adapter with a $1.04 upper price cap. If both collateral and debt are valued through the same USDT reference, a USDe market discount may leave the protocol's reported collateral health unchanged even as the value left after debt repayment falls. Debt growth, balance changes and risk parameters can still move that health measure.
The reports stress that the disclosed leverage target is not an observed position. The exact vault account, its current collateral and debt, and its live oracle wiring remain unverified. LlamaRisk's onboarding recommendation, amended Oct. 19, proposed a 93% USDe collateral factor and capped USDT pricing for an Ethena Ecosystem Spoke.
First $0.2523Latest $0.2048-18.8% over the period
Points are daily observations, not closing prices.
Questions readers ask
What is Ethena Pay's Earn+?
Earn+ is an external vault product run by Upshift and Steakhouse through Aave v4 on Avalanche. Ethena Pay provides the interface and advertises up to 12% APY, while the vault targets roughly 11x leverage using USDe collateral and USDT borrowing.
Why might reported collateral health look stable during a USDe discount?
Aave Labs said the Avalanche USDe price reference follows USDT. If both collateral and debt are valued through the same USDT reference, a USDe-only market discount may not show up in the protocol's health calculation, even though the value left after debt repayment has fallen.
Is the advertised 12% APY guaranteed?
No. The reports describe up to 12% APY as an advertised target, not a guaranteed return. Borrowing costs, fees, reward rates and exit conditions can affect the net result, and the exact components needed to reconstruct a net return remain unverified.
