Intro

The Ethena protocol and its native USDe stablecoin launched on mainnet earlier this year. This came alongside the season 1 ‘shards‘ campaign leading up to the launch of the native governance token ENA in early April. As of today, ENA trades at a $15b FDV and peaked at a valuation of $20b a few weeks ago. The season 1 campaign lasted for 6 weeks and turned out to be an incredibly strategy from an ROI point of view.

Defi Maestro is a notable trader on CT and was one of the few people to nail the Ethena season 1 trade. By identifying the strategy early and scaling in with size and conviction, DeFi Maestro was able to farm 8 figures worth of $ENA ($10m+ at current prices). In today’s article, we dive into his strategy, how he identify these trades, his thoughts on the season 2 campaign and more.

Before diving in, make sure to follow Defi Maestro and subscribe to On Chain Times as we have several articles on points strategies (including Ethena Season 2 projections) going live over the coming weeks.

Background

Could you give a brief description of yourself - when you entered the crypto space and what you focus on today?

“I stumbled upon crypto in 2014 when I was trading virtual items in CSGO and DOTA2. I came across a site that allowed me to sell those virtual items for BTC and I went deep into the rabbit hole of cryptocurrencies ever since.

I’m currently a DeFi Strategist with Mantle. I help to plan strategies to onboard users towards the Mantle ecosystem and identify long term goals for the team to work towards.

I used to run my own Cryptocurrency Mining Operations as well as a private venture fund with a few friends in the past. I also had a short stint with Spartan Labs prior to joining Mantle.“

What type of investing do you focus on? Liquid tokens, early stage, DeFi strategies?

“I do a mix of strategies and it's really dependent on the overall macro climate for the cycle. Currently, my portfolio consists of mostly DeFi Strategies using spot holdings. Leveraged perpetuals trades typically consist of just 10% of my portfolio while private rounds are less than 5%.

I feel that DeFi strategies currently have the highest ROI with low risk exposure. Points farming in particular is extremely fun for me and allows me to get early exposure towards protocols that I’m bullish on.“

Ethena S1 Trade

Could you break down your strategy for the season 1 shards campaign?

“My strategy for S1 of the Ethena Campaign was pretty straightforward. I bought up Pendle YT heavily and looped whatever capacity was available on gearbox for USDe.

Gearbox was actually more cost effective than YTs but the capacity was constantly full.

Pendle YTs had sufficient liquidity for me to enter in size and the early prices for YTs were way lower than I expected. I did approximately a 12-15x on my YT positions and farmed low 8 digits of ENA.”

What made you commit to this trade? Were there any specific things that made you realize this was going to be a phenomenal strategy?

“I think users initially just really underestimated the FDV of ENA. I had pretty strong conviction that Ethena would do well and they basically led a stable coin yield re-rating across the DeFi landscape. Money markets like Gearbox and Morpho had vanilla stables being borrowed at 30-50%. Dai increased sDAI yield to 15% just to remain attractive.

There was also some FUD about the USDe yields due to its reliance on funding rates but I felt that there were sufficient failsafes in place to manage that risk. I was genuinely excited for the Ethena launch and it was refreshing to see a DeFi protocol trying out a different approach towards acquiring yields and passing it on to the users.  Hence, I did some modeling on the expected FDV and likely airdrop size which allowed me to have an estimation of the fair value of YT USDe.

At the start, YTs were going for $0.04 which meant that shards had an approximate price of $0.000014~. This differed from my initial calculations by 3-5x and I was convinced that the upside was sizable. I saw that no one else was talking about it and I decided to have faith in my own estimations and went in heavily.

It was basically a month long trade whereby i either lose 30% in the worst case scenario of $ENA launching below 1b FDV or I get multiples if they launch above that. Thankfully the Ethena team had amazing execution and it turned out to be one of my best trades this year.”

Everyone has that one trade, good or bad, that they won’t ever be able to forget. What is the story behind yours?

“The YT trade I did for USDe probably counts as one of my best trades.

Another trade that I did really well in was scaling heavily into Luna at $2. We all know how that ultimately turned out but fortunately I did still make some sizable gains on it.”

Identifying Trades

How would you advise someone to find these type of strategies early?

• “Dive deep into numbers and get yourself deeply entrenched in protocols that interest you.
• Be constantly updated with every step the protocols take and also have your own expectations on outcomes from each updates.
• Having a deep understanding of the protocols allows you to be able to detect possible plays that you can capitalise on.
• Don’t be afraid to have differing opinions from the public. Rationalize your thoughts clearly and execute with conviction.
• Always review your mistakes and finetune the process along the way.”

Were there any traders you looked up to or admired, when first getting started?

“Not really. I sort of experimented on my own over the years and found my own style of trading. I’m absolutely terrible at technical trading.”

Ethena S2 Predictions

What are your thoughts regarding Ethena S2?

Read the full tweet here.

General Advice

Looking ahead, what are some things that excite you in the space right now?

• “Building out new stuff on Mantle.
• Advising @ranger_finance for their upcoming launch.
• The rise of the various different DAs and how they impact the performance of the different chains.
• AI projects and their possible use cases within the DeFi ecosystems.”

Are you farming on any non-evm chains?

“I use Solana occasionally. Played around with Aptos and Sui for a bit but didn’t find anything particularly interesting there.”

As exploits and scams are becoming more sophisticated, reports of funds being drained are on the rise. What are some precautions you take to avoid falling victim to these potentially bankrupting threats?

• “Always hold majority of your funds on hardware wallets.
• Never download files from emails or telegram.
• Have a computer just for crypto and keep it separate from your day to day usage.
• Have your wallets split between different hardware wallets.”

If you had to choose one — MetaMask or Rabby?

“Rabby for sure.”

Conclusion

Many of the best strategies in the space are contrarian. While most market participants were busy shouting about how Ethena is unsustainable and flawed, Defi Maestro went in with conviction and farmed what might have been the first 8-figure airdrop in crypto history.

As mentioned in the beginning, we will be releasing an in-depth guide on Ethena season 2 completely for free to the readers here at On Chain Times. Make sure to subscribe to ensure you don’t miss this.

And give DeFi Maestro a follow on X.

Disclaimer: The information provided is for general informational purposes only and does not constitute financial, investment, or legal advice. The content is based on sources believed to be reliable, but its accuracy, completeness, and timeliness cannot be guaranteed. Any reliance you place on the information in this document is at your own risk. On Chain Times may contain forward-looking statements that involve risks and uncertainties. Actual results may differ materially from those expressed or implied in such statements. The authors may or may not own positions in the assets or securities mentioned herein. They reserve the right to buy or sell any asset or security discussed at any time without notice. It is essential to consult with a qualified financial advisor or other professional to understand the risks and suitability of any investment decisions you may make. You are solely responsible for conducting your research and due diligence before making any investment choices. Past performance is not indicative of future results. The authors disclaim any liability for any direct, indirect, or consequential loss or damage arising from the use of this document or its content. By accessing On Chain Times, you agree to the terms of this disclaimer.