What caused the surge in ENA? Analysis of the governance proposal to distribute protocol revenue to sENA holders
On November 6, the well-known market maker Wintermute initiated a proposal on the Ethena governance forum, which includes two key points:
1. Propose to the Risk Committee to allocate Ethena protocol revenue to sENA holders
2. Request the Ethena Foundation to clarify the current revenue of the protocol to facilitate planning of the revenue distribution proposal
From my perspective, Wintermute's proposal is strong and reasonable.
There are two reasons:
1. I have mentioned multiple times in the past that ENA empowerment is weak, making it difficult to inspire user confidence
2. Ethena has generated considerable protocol profits to date, yet has not publicly and clearly explained the distribution and usage details of the revenue
By requesting an official response through Wintermute in the form of a governance proposal, Ethena will not be able to evade and must make a direct commitment.
In fact, at the moment of writing, Ethena has already responded below this proposal, with key points as follows:
1. Acknowledgement of the lack of a guiding plan on how to allocate protocol revenue to ENA holders
2. Commitment that from this day forward, protocol revenue will only be used for protocol development purposes and will not flow to Ethena Labs or developer entities
3. Special uses of protocol revenue will be confirmed through governance
In summary, the distribution of Ethena protocol revenue to sENA holders is still just a preliminary proposal and idea, and it requires approval from the Risk Committee, as well as further planning on how to design the relevant content of the revenue distribution.
From my point of view, this proposal indeed has short-term positive effects, but we cannot accurately predict the likelihood of the proposal passing, nor can we estimate how long it will take to implement the contents of the proposal. The price may fluctuate but may not sustain a long-term increase until new information emerges.
Furthermore, Ethena has not yet publicly released the details of the usage of its protocol revenue.
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※ The above content does not constitute investment advice. Please operate according to your own risk tolerance, and DYOR cautiously participate in the investment market.
※ Cover image sourced from the Ethena governance forum