Ethena is one of the fastest-growing stablecoin protocols, offering its flagship product, USDe. With its rapid adoption and soaring TVL, Ethena has quickly established itself as a leading player in the tokenized dollar space and in decentralized finance more broadly.

However, Ethena users faced a challenge: the 7-day unstaking cooldown for sUSDe.

To overcome this, Ethena, Merkl, and the Aave Chan Initiative (ACI) joined forces to design an innovative incentive solution that would remove friction for users and unlock new opportunities for the protocol.

Ethena, Merkl, and the Aave Chan Initiative (ACI) launched the Liquid Leverage program, a new integration on money markets that enabled participants holding USDe to earn rewards.

While the ACI handled the overall incentivization strategy and the design choices for the reward campaigns, Merkl leveraged its scalable and customizable incentive infrastructure to power the program.

The program was sophisticated and required significant flexibility. The Merkl engine managed multiple parameters to determine user eligibility and distribute rewards automatically, from cross-asset balance checks to health factor conditions and capped APR mechanics, ensuring both accuracy and a seamless experience for participants.

Initially launched on Ethereum, the program was later expanded to Plasma when the chain went live.

The campaign delivered strong engagement and broad distribution:

• $20M in rewards distributed (at the time of writing)
• ~$2B TVL across the Aave market, demonstrating robust scaling
• ~1,000+ participants actively engaging with the program

Merkl ensured rewards were distributed accurately and transparently, without any technical interruptions or misallocations. The program has since helped Ethena engage a wider audience and expand its reach.