Ena can be divided into three phases:

Phase 1: Being able to calculate project returns.

In April, when the second season just started, the returns were uncertain. At that time, Guage didn’t invest heavily and only used the locked USDE to borrow on Morpho. By mid-June, the USDE #tvl stabilized around $3.5 billion, with 90 billion new points added daily. Guage estimated the total points to be 12 trillion points (4.864 trillion + 900 billion * 77 days). Guage calculated hedging based on a 4% airdrop (why not 5% will be explained later), estimating 1 billion points would convert into 5,000 tokens. With the token price at $0.90, this corresponded to a 40% annualized return. Guage invested around $1.6 million at that time and hedged all expected outputs of 250,000 tokens at an average price of $0.81.

Phase 2: Shorting Ena and going long on YT combination provides 50%+ returns.

By the end of June, when the token price dropped to $0.55, shorting #ENA💰智能多空策略 and going long on YT started to provide about 50% profit. This spread widened with a big rebound in the token price after the drop, peaking around 80% by late July to early August. During this phase, Guage invested close to $800K in YT during July and August, with some positions closed early due to the excessive price drop.

Phase 3: In August, only YT from September onward was available on Pendle.

There was a calculation trick here: by selling YT for September and October before September 2, one could achieve an 80% return! So Guage invested $250K in October’s SUSDE YT, entering at around 12% APY. However, by the end of August, he sold it at a 10.7% APY, realizing a return of 18.88%. This also included Guage’s expectation that early in the month SUSDE dividends would be low, which would also lower YT, hoping dividends would rebound by month-end and YT could profit further. However, the dividends remained at 4%, and this gamble failed.

(The above returns were calculated based on a 4% #airdrop and real-time hedge prices.)

Across the three phases, Guage spread his investments over six accounts, earning a total of 409.4 billion points and receiving 2.64 million #tokens .

Missed opportunities:

1. Guage hedged conservatively based on a 4% airdrop expectation, not 5%, because in the first season, although a 5% airdrop was promised, it wasn’t fully delivered, and the official response was dismissive. As a result, Guage missed out on hedging 600,000 tokens, losing $180K.

2. He unlocked his hedge early at $0.326, and later the price dropped, missing out on another $120K.

3. In Phase 3, he closed his October YT position by the end of August. If he had held until September 3-4, he could have closed at the original price, losing $30K. In hindsight, if he anticipated a 5% airdrop in Season 3 and continued locking, YT would still have demand, so there was no need to sell at the end of August.

4. The cost of hedging for three months was a total of $53K.

Guage doesn't have huge financial needs anymore. With his current wealth and real estate prices, he can easily afford a 200 sqm house, enjoys Michelin freedom, Maotai 14th generation freedom, and travel freedom—he's content. Of course, there are better houses like the Imperial Garden and Henghe Qishang, but he's leaving that to fate and won’t actively pursue them.

He will continue discussing his strategies but won’t disclose profit numbers publicly anymore.