Ethena Pay launched Earn+ on October 28, offering a strategy on Aave v4 on Avalanche that uses USDe as collateral to borrow USDT. The strategy is operated through external vault providers Upshift and Steakhouse, targets roughly 11x leverage and advertises annualized yields of up to 12%. The key risk is not limited to the lending protocol's displayed collateral health: if USDe trades below USDT, the position's accounting value may differ from the amount recoverable after repaying debt.
The specific Earn+ vault accounts, current collateral and borrowing balances, and oracle setup have not been verified. The roughly 11x figure is a stated strategy target, not confirmation of actual positions or user losses.
A USDe discount may not show in the oracle price
Oracles supply lending protocols with prices for collateral and debt. Aave's health factor measures how close a position is to liquidation based on collateral valuation, liquidation parameters and the amount borrowed. In a technical assessment dated October 20, Aave Labs said the USDe price reference on Avalanche tracks USDT and may therefore fail to reflect a discount in USDe relative to USDT. The described setup uses Chainlink's USDT/USD feed, with an adapter capping the price at $1.04.
If both sides of a position are valued using the same USDT reference, a USDe-specific discount may not be reflected in the protocol's displayed collateral health. Changes in debt, balances or risk parameters can still affect the health factor. In an updated listing recommendation dated October 19, LlamaRisk proposed a 93% USDe collateral factor for the Ethena Ecosystem Spoke in the Aave v4 Core instance and recommended a cap on the USDT price. Those recommendations do not establish that Earn+ uses the same account or configuration.
A hypothetical position shows how a discount affects equity
The following is an illustrative example based on the stated leverage target. It does not represent an actual Earn+ position or a reported loss. If leverage is defined as total assets divided by equity, $100 of initial equity at 11x leverage would correspond to $1,100 of USDe assets and $1,000 of USDT debt, assuming both tokens initially trade at $1. If USDT stays at $1, the debt balance is unchanged, and interest, rewards, fees, trading costs and rebalancing are excluded, equity after repaying the debt would equal the USDe asset value minus $1,000.
| Hypothetical USDe price | USDe asset value | Equity after debt repayment | Loss as a share of initial equity |
|---|---|---|---|
| $0.99 | $1,089 | $89 | 11% |
| $0.98 | $1,078 | $78 | 22% |
| $0.95 | $1,045 | $45 | 55% |
These figures estimate economic value under the stated assumptions. They are not losses incurred by Earn+ and do not indicate an actual liquidation threshold. The final outcome would also depend on prices and trading costs at exit. Results could differ if managers reduce exposure early or if the vault's actual leverage is below its target. Economic equity can fall even if a position has not reached the protocol's liquidation conditions.
Borrowing costs and fees affect net returns
In the same hypothetical position, debt equals 10 times the initial equity. If the annual cost of borrowing USDT rises by one percentage point and all else stays equal, simple-interest financing costs over a year would amount to about 10% of initial equity. This is a cost illustration, not a forecast of Earn+ returns. Aave says borrowing rates are shaped by supply and demand as well as governance-set rate curves. Its interface also distinguishes the market's base annualized borrowing rate from the rate that applies to a specific position. Accrued interest increases debt and may reduce the health factor over time.
Aave Labs describes ordinary USDe as a non-yield-bearing asset; the yield-bearing token is sUSDe. As a result, sUSDe staking yields should not be treated as returns on the USDe collateral held by Earn+. Rates advertised on the Ethena Pay page may change, and Earn+ is not included in Daily Boost. Ethena Pay waives its own deposit and withdrawal fees, but fees charged by underlying vaults still need to be considered.
Upshift's general fee documentation lists vault-specific management and performance fees, as well as an instant redemption fee. Earn+'s specific fee rates, and the composition of yield and incentives used to calculate net returns, have not been verified. The advertised maximum yield alone therefore does not show the return after borrowing costs and underlying fees.
Redemption timing and access to funds remain key considerations
Vault managers could, in principle, use independent market prices to decide when to reduce a position. Monitoring USDe's market price, lowering leverage or repaying debt early could reduce exposure to a discount. The effectiveness of those actions depends on who can make them, how quickly they respond and the liquidity available at the time. Upshift's general risk framework refers to configurable withdrawal buffers and limits on net asset value (NAV) changes. It also says an owner multisig can immediately pause withdrawals and initiate emergency withdrawals. Whether Earn+ uses these settings, or has separate triggers tied to USDe's price, has not been verified. Capping NAV changes would not remove an underlying economic loss.
Upshift's general redemption documentation describes a standard process that queues withdrawals by cycle and settles them in batches, as well as an instant-redemption route supported by a liquidity buffer. This does not confirm which route Ethena Pay users can access or how much cash would be available to withdraw under market stress. Aave Labs also notes that redeeming USDe through its issuer from Avalanche requires bridging the token to Ethereum and then using Ethena's permissioned process. Local secondary markets and Avalanche's Peg Stability Module are other exit routes.
Ethena Pay says withdrawal requests have no lock-up period and are usually processed to a USD Account within 24 hours, while its FAQ cautions that processing may take longer. Upshift's general terms allow transfers to be delayed and permit supplementary terms to apply; its public index of vault-specific terms does not currently list an entry for this vault. Separately, Ethena Pay's terms require users to accept the Earn+ disclosures before first use. In-app terms and the public processing-time description should therefore be considered separately.
Allocation limits and availability restrict participation
Ethena's FAQ sets Earn+'s total allocation cap at $4.5 million and limits individual allocations by user tier: $20,000 for Standard, $50,000 for Pro and $200,000 for VIP. The more than $8 million in USDe balances and roughly 1,400 active users announced at launch refer to Ethena Pay overall, not the Earn+ vault alone.
The service is also available in a limited number of markets. The app lists 47 countries as open, while the United States, European Union and United Kingdom are marked as coming soon. Some features have additional eligibility requirements. Assessing the strategy's outcome requires looking separately at protocol health, net returns after financing and fees, and the available withdrawal routes, liquidity and processing times; these measures are not interchangeable.