Introducing the sUSDe ARM with Ethena
The sUSDe ARM is now open for external depositors.
The sUSDe ARM is the first ARM Vault deployed for a yield-bearing stablecoin. The same mechanism that has processed over $3B in volume across stETH and eETH now applies to Ethena’s sUSDe.
sUSDe Has a Redemption Path that Standard AMM Pools Ignore
sUSDe is redeemable for its full USDe collateral value through Ethena's unstaking process. That creates a predictable secondary-market dynamic: sUSDe trades at a discount to its USDe backing on DEXs because the unstaking queue takes time, and that illiquidity premium reflects in sUSDe pricing.
In a standard stablecoin pool, that discount is captured by arbitrageurs. The LP earns a swap fee, and the spread leaves the system instead of going back to the liquidity providers that support it.
Unlike traditional AMMs, the sUSDe ARM routes the spread back to LPs.
The sUSDe ARM continuously quotes a USDe price that users can trade against. When its quote creates an opportunity, users sell sUSDe to the vault. The acquired sUSDe passes through Ethena’s unstaking process, and USDe returns when redemption settles. When no trades clear the ARM’s pricing threshold, idle USDe routes to Aave V3, earning lending yield for ARM Vault depositors.
That is the mechanism: redemption arbitrage when discounts are present, lending yield when they are not.
USDe Holders Earn Yield Without Taking Directional Exposure.
Depositors earn from sUSDe/USDe arbitrage while holding a stablecoin-denominated position. The current trailing 30-day APY is 4.6%. Yield is tied to market conditions: wider sUSDe discounts produce higher spreads and stronger LP returns.
At minimum, idle capital earns Aave V3 lending rates between arbitrage cycles.
Every ARM Cycle Brings sUSDe Closer to Fair Value.
The ARM's arbitrage doubles as peg support: it absorbs sUSDe whenever it trades below redemption value, deepening liquidity and reinforcing the peg to USDe. For sUSDe holders across the Ethena ecosystem, that means tighter secondary-market pricing and reduced friction when exiting to USDe.
The ARM Framework Extends Beyond Liquid Staking
The stETH and eETH ARMs demonstrated that routing the arbitrage value to LPs, rather than external arbitrageurs, produces stronger capital efficiency than standard AMM pools. The sUSDe ARM applies the same logic to a stablecoin market.
LSTs, LRTs, yield-bearing stablecoins, and RWAs all share the same structural dynamic: a primary-market redemption value that secondary markets price around. The sUSDe ARM is the first stablecoin deployment of this framework.
The sUSDe ARM is now open to the public.
Explore the sUSDe ARM → https://app.originprotocol.com/#/arm/1:ARM-sUSDe-USDe
