On March 29, 2024, Binance announced the launch of the 50th phase of the new coin mining project Ethena ($ENA). At that time, users can transfer BNB on the Launchpad official website after 8:00 on March 30, 2024 (East 8th District). FUSD is invested in the ENA mining pool and receives $ENA token mining rewards within 3 days. Combining the recent financial situation of Binance Launchpool, peer benchmarking and mining cost calculations, we initially estimate that the opening price of $ENA will have a bottom of 0.25 and a maximum price of 0.7U.

1. Project introduction

1) Basic introduction

Ethena Labs is the creator of USDe, a synthetic dollar protocol built on Ethereum. This initiative addresses the need for a stable, scalable form of money in the crypto-native space that is not dependent on the traditional banking system.

Ethena Labs reignited Defi enthusiasm after announcing its funding on July 12, 2023, to create a USD-pegged digital currency using LST (stETH).

Ethena Labs’ goal is to provide a decentralized, permissionless savings product to a broad audience. EthenaLabs’ synthetic U.S. dollar, USDe, aims to be the first crypto-native, censorship-resistant, scalable, and stable financial solution enabled by delta hedging of collateralized Ethereum.

2) Detailed product features

Design

How it works

Staking USDe

Hook Arbitrage

EthenaLabs plans to introduce a product they call “Internet Bond” alongside USDe. According to the EthenaLabs Gitbook, it will be a crypto-native, yield-generating, USD-denominated savings vehicle based on collateralized Ethereum returns and leveraging funding and basis differences in perpetual contracts and futures markets.

EthenaLabs stands out for its unique mission and innovative approach. Unlike other CDP projects such as Maker’s DAI, Liquity’s LUSD, and Curve’s crvUSD, EthenaLabs’ USDe generates its USD value and yield through two main strategies:

• Take advantage of stETH and its inherent benefits.

• Take an ETH short position to balance delta and take advantage of perpetual/futures funding rates.

This strategy allows protocol synthesis to create a delta-neutral CDP that combines spot deposits of stETH with corresponding short positions established through partnerships with CEXs such as ByBit, Binance, and others.

Holding Ethena’s sUSDe (collateralized USDe) essentially becomes a basis trade, balancing the spot stETH position with the short ETH position in the market. This setup provides users with exposure to the difference in returns between these positions, currently yielding an approximate return of ~27%.
2. Financing history

On July 17, 2023, the crypto startup Ethena completed a $6 million seed round of financing, led by Dragonfly, and supported by trading platforms such as Deribit, Bybit, OKX, Gemini and Huobi, as well as BitMEX founder Arthur Hayes and his family office.

On February 16, 2024, Ethena Labs completed a US$14 million strategic round of financing at a valuation of US$300 million. Dragonfly, Brevan Howard Digital and BitMEX founder Arthur Hayes’ family office Maelstrom co-led the investment, PayPal Ventures, Franklin Templeton, Avon Ventures, Binance Labs, Deribit, Gemini and Kraken participated in the investment. This round of financing adopts the structure of future equity simple agreement and token warrants.

3. Team information

The Ethena Labs team has a luxurious lineup, and the main leaders come from top teams such as BitMEX, WINTERMUTE, Deribit, and AAVE.

4. Token economy
The total supply of $ENA is 15 billion, and approximately 9.5% of the tokens will be unlocked at the opening.

$ENA token release cycle

Token functions:

① Governance: ENA token holders can vote on protocol governance decisions.

4. Community situation

• Twitter: 140.2K; https://twitter.com/ethena_labs

5. Prediction of token launch performance

Binance Launchpool Historical Performance

From the figure below, we can see the performance of Binance’s recently launched tokens through Launchpool and Launchpad. We can see that the recent Launchpool has a high return rate and high participation. The number of BNB participating in this Launchpool has exceeded 17 million.

Comparison of Launchpool project opening performance:

Funding comparison:

The opening circulation volume of $ENA token this time is 9.5%. From a financial perspective, we believe that the performance of the last ten projects since the market rebounded is relatively indicative. According to the average opening transaction volume of the last ten Launchpool projects, it was 477 million U.S. dollars. The average increase in the market value of the recent projects at the opening of the market was 40.02x, corresponding to an average market value of US$353 million. If the $ENA token reaches this circulating market value at the opening, the corresponding price will be approximately US$0.25.

Mining cost calculation:

If we consider Binance's BNB borrowing cost, we refer to the 5-day moving average of BNB price (calculated based on BNB being 590U at the time of writing this article). The mining cost of $ENA is approximately 0.54U.

Market value comparison:

6. Quote

https://www.ether.fi/

Binance Research, https://www.binance.com/en/research/projects/ethena

Ethena research report, https://www.aicoin.com/zh-CN/article/391573