Nov 16, 2024

6thTrade


The Ethena Foundation has approved a proposal by cryptocurrency market maker Wintermute to share a portion of Ethena Protocol's fee revenues with holders of its native token, ENA. The announcement was made on Wintermute’s governance forum on November 15. $ENA

Revenue Sharing for ENA Stakers

On November 6, Wintermute proposed that a portion of Ethena’s fee revenue be allocated to stakers of ENA, the protocol’s native token. The Ethena Foundation confirmed that the proposal was approved by its Risk Committee, signaling the next step toward implementation.

“The Ethena Foundation is pleased to share that the proposal to enable an $ENA fee switch has been approved by the Risk Committee,” read the forum post.

The Foundation stated that parameters for the fee switch activation will be finalized by November 30, with detailed implementation mechanics to follow shortly after.

USDe: Ethena’s Growing Stablecoin

Ethena Labs introduced its innovative, interest-earning stablecoin USDe in February, allowing users to mint the token against assets like Bitcoin (BTC), Ether (ETH), staking derivatives, and other stablecoins. The protocol mitigates portfolio volatility by employing off-chain financial derivatives.

Since its launch, USDe’s circulating supply has skyrocketed to nearly $3.2 billion, reflecting its increasing adoption and the protocol's market fit.

Bringing Value to ENA Stakers

Ethena’s governance token ENA, launched in April, can be staked for sENA. However, prior to Wintermute’s proposal, sENA lacked a clear mechanism for accruing value from the protocol’s revenues.

Wintermute addressed this issue in its proposal:

“The Ethena Protocol has and continues to generate substantial amounts of real revenue, indicating a clear level of product market fit for USDe. Unfortunately, sENA does not directly benefit from this revenue, resulting in a disconnect between sENA holders and the growth of the protocol.”

The proposal aims to align ENA holders’ interests with the protocol’s financial performance, fostering better integration between the token and its underlying fundamentals.

Wintermute Expands Support for USDe

Wintermute has already integrated USDe into its operations. On October 25, the company began accepting the stablecoin as collateral for spot and derivatives trading. Wintermute clients can now use USDe for various purposes, including:

  • Options trading

  • Credit default swaps (CDS)

  • Forward and spot trading

This move expands USDe’s utility and positions it alongside existing accepted collateral like BTC, ETH, Solana (SOL), and USD Coin (USDC).

What’s Next for Ethena and ENA?

The activation of the ENA fee-sharing mechanism is expected to further align tokenholders with the protocol’s growth, potentially driving increased adoption of both ENA and USDe. With Ethena’s protocol generating significant revenue and Wintermute’s continued support, the foundation appears poised to strengthen its foothold in the decentralized finance (DeFi) ecosystem.