**Reevaluating Ethena: Is ENA Undervalued After an 80% Plunge and Rebound?**

Ethena is a rare, phenomenon-level DeFi project that experienced rapid growth and subsequent decline. Its token, ENA, fell by 87% from its peak, but rebounded to around $1 billion in market value after expanding its stablecoin USDE’s use scenarios.

**Ethena’s Business Model**

Ethena is a synthetic dollar project with a business model similar to other stablecoin projects, such as MakerDAO and Frax. Its innovation lies in using raised assets to make profits through perpetual contract arbitrage.

**Current Business Situation**

Ethena’s core business indicators, including scale, revenue, comprehensive costs, and actual profit levels, are currently in a state of huge losses. Its valuation is not underestimated compared to MakerDAO, a representative stablecoin project.

**Future Business Outlook**

Despite its current losses, Ethena has shown strong business development capabilities and is more aggressive than other projects. Its ability to increase investors’ optimistic expectations and push up currency prices will be crucial in forming an upward spiral.

**Valuation Level**

Ethena’s ENA token is not cost-effective in terms of protocol revenue and profit compared to MakerDAO. However, as a new player in the stablecoin track, Ethena’s valuation may be affected by its rapid scale expansion and adoption.

**Challenges Ahead**

Ethena faces a critical point where its growth, promoted by token subsidies, and price increase, supported by optimism, lack a value link. This may lead to a downward spiral, and only a few projects can rise from the ashes. Ethena’s USDE still needs time to verify its stability and ability to survive after subsidies are reduced.

**Comparison with Other Stablecoin Projects**

Ethena’s business model is similar to other stablecoin projects, but its use of perpetual contract arbitrage is innovative. A quantitative comparison with MakerDAO shows that Ethena’s token, ENA, is not cost-effective in terms of protocol revenue and profit.

**Conclusion**

Ethena’s business model, although innovative, is not yet proven to be sustainable in the long term. Its valuation is not underestimated compared to MakerDAO, but its ability to increase investors’ optimistic expectations and push up currency prices will be crucial in forming an upward spiral. Ethena’s USDE still needs time to verify its stability and ability to survive after subsidies are reduced.

<p>The post ‘Ethena Revisited: Is ENA Still Underestimating Its True Worth?’ first appeared on CoinBuzzFeed.</p>