Ethena protocol announced on Friday its expansion into real-world asset (RWA) tokenization through AAA-rated Collateralized Loan Obligations (CLOs). The firm behind the yield-paying stablecoin USDe stated that AAA CLOs represent the first asset category under evaluation, citing their position at the top of the capital stack with a zero default rate at the AAA level across the entire history of the asset class. The expansion aims to boost yields and decouple returns from crypto market cycles, addressing the correlation between USDe's yield structure and volatile crypto funding rates during bear markets.
Ethena Selects AAA CLOs for Credit Quality and Liquidity Profile
Ethena identified AAA CLOs as meeting criteria for high liquidity and low downside risk. Collateralized Loan Obligations are pools of corporate loans managed by asset managers, similar to an ETF tracking different company stocks but focused on pooled corporate loans instead. The AAA rating represents the highest evaluation score that rating firms like Moody's assign to financial products, indicating the lowest level of default risk and high credit quality. According to the team, the Janus Henderson Anemoy AAA CLO Fund specifically fits these criteria.
![Ethena AAA CLO announcement]()
Ethena's announcement of AAA CLO evaluation. Source: X
CLO Sector Showed 8% COVID-Era Decline vs S&P 500's 33% Drop
Ethena cited historical performance data showing the broader CLO sector fell only 8% during the COVID-19 financial crisis and 2% during high Fed interest rate periods. In both scenarios, the S&P 500 Index (SPY) and broader credit segment dropped 33% and 22%, respectively. For a 5% drawdown, CLOs took 5-8 days to recover. In comparison, Bitcoin has been down +50% from its $126K peak over approximately eight months since the contraction began.
![Ethena CLO performance comparison]()
Historical performance comparison of CLOs vs other assets. Source: Ethena
Ethena's USDe leverages crypto funding rates for yield returns, with higher funding rates during bull runs leading to higher yields. Bear markets compress funding rates and yield, a situation that worsens when recovery takes longer. The protocol previously diversified reserve assets to RWA with BlackRock's BUIDL, which leverages U.S. Treasury bonds.
Ethena Allocates $310 Million to Janus Henderson Anemoy AAA CLO Fund
Ethena plans to allocate $310 million to the Janus Henderson Anemoy AAA CLO Fund. According to the team, this allocation will break the yield returns correlation with crypto market swings and offer more stable returns. The team stated that RWA exposure breaks that correlation because AAA CLO yields are driven by short-rate policy, credit-spread dynamics, and loan market structure—none of which are tied to crypto positioning or sentiment.
The move follows Ethena's recent partnerships with Coinbase and Brazil's largest exchange, Mercado Bitcoin. USDe demand has dropped sharply since last October.
FAQ
What did Ethena announce on Friday regarding RWA expansion?
Ethena announced on Friday its expansion into real-world asset tokenization through AAA-rated Collateralized Loan Obligations (CLOs), with AAA CLOs as the first asset category under evaluation. The protocol stated these assets have a zero default rate at the AAA level across the entire history of the asset class.
How much is Ethena allocating to the Janus Henderson Anemoy AAA CLO Fund?
Ethena plans to allocate $310 million to the Janus Henderson Anemoy AAA CLO Fund. According to the team, this allocation aims to break the correlation between yield returns and crypto market swings while providing more stable returns for USDe.
How did CLOs perform during the COVID-19 crisis compared to the S&P 500?
During the COVID-19 financial crisis, the broader CLO sector fell 8% while the S&P 500 Index dropped 33%. During high Fed interest rate periods, CLOs declined 2% compared to the broader credit segment's 22% drop. CLOs took 5-8 days to recover from a 5% drawdown.
