ETHENA PAY'S 12% EARN+: WHAT'S BEHIND THE YIELD

Summary from the TLDR Crypto newsletter

Ethena Pay is only the interface, and funds move to an Upshift vault curated by Steakhouse. The strategy supplies USDe on Aave V4 on Avalanche, borrows USDT, swaps to more USDe, and repeats, at about 11x leverage. Base USDe supply yield is about 0%, so the 12% comes almost entirely from Merkl incentives and would be deeply negative without them. Risks include liquidation if USDe or USDT dislocate (USDe briefly hit about $0.65 on Binance in Oct. 2025), incentives ending or diluting, and smart contract risk.