Ethena Pay’s 11x leverage loop promises high yield, but risks hidden losses

Ethena Pay’s new Earn+ vault design pairs USDe collateral with USDT borrowing, creating a potential gap between the value a lending protocol reports and the money a user could recover.The app’s Oct. 28 launch disclosure describes a strategy targeting roughly 11 times leverage whose USDe oracle follows USDT.If USDe falls against USDT, the two measures can diverge. A price reference that follows the debt token can miss the collateral’s discount, leaving reported collateral health insensitive to a market move that reduces the value remaining after debt repayment.Earn+ is an external vault service run by Upshift and Steakhouse through Aave v4 on Avalanche. Ethena Pay supplies the interface and advertises up to 12% APY.The oracle follows a different assetAn oracle supplies the prices a lending protocol uses to value collateral and debt. Aave’s health factor compares collateral value, adjusted for its liquidation parameter, with borrowing. That calculation determines proximity to liquidation.In its Oct. 20 technical assessment, Aave Labs explicitly said the Avalanche USDe price reference follows USDT and would miss a USDe-specific downside depeg. The assessment describes a Chainlink USDT...