However, despite its innovation, Ethena faces skepticism about the sustainability of its high-stakes rewards. Critics point to the risks of yield inversion, where negative returns can quickly destabilize a protocol. Others argue that hedging transactions come with costs that can ultimately reduce profits.

In an effort to drive adoption and growth, Etena also introduced a "Shard Campaign" to stimulate activity around USDe. The program issues rewards in the form of tokens for actions such as asset creation and liquidity provision. Shard rewards decrease over shorter "epochs" lasting several days or weeks, allowing for a rapid influx of participants.

However, the campaign limits participation from US users to ensure compliance with regulatory requirements. Some have criticized these restrictions as exceptional and contrary to the ideals of decentralization.

As algorithmic stablecoins remain controversial following the collapse of UST, USDe represents a bold new experiment. However, its long-term sustainability remains uncertain as both benefits and risks are plausible.