Author: Jonaso
Compiled by: Tim, PANews
Recently we have all witnessed the surge in ENA. Not only has the price soared, but it has also attracted a lot of attention. The speed of its rise is astonishing.
But what most people don’t realize is this: the major catalyst has yet to occur: the fee switch.
The rise of new stablecoin giants
In less than a year, the supply of USDe has increased from 0 to more than 6 billion US dollars, surpassing DAI to become the third largest decentralized stablecoin, second only to USDT and USDC.
sUSDe’s annualized yield has reached 10%, making it the highest sustainable yield in the current crypto space. The surge in yields is driving the development of aggressive circular arbitrage strategies on Aave and other decentralized platforms.
Financing rates are rising, with Bitcoin currently at 19% and Ethereum at 12%. This is the first time in six months that both have broken through the 11% baseline at the same time.
Ethena's revenue this week reached $7.8 million, with an annualized expected revenue of over $400 million. Conservative estimates suggest there is still room for growth, as Ethena has currently transferred 41% of its stablecoin reserves to perpetual contract strategies with higher returns, while the average market funding rate has reached 14%.
The higher annualized rate of return also satisfies a key condition for enabling the ENA fee switch: sUSDe’s yield must be at least 5% higher than the current Sky Savings Rate (currently 4.5%), a milestone that has now been confirmed to have been achieved.
Market Macro Perspective: Fed Rate Cuts and Ethena Stablecoin Strategy
Ethena's business model stems from market volatility and high funding rates for perpetual contracts.
Unlike traditional stablecoins such as USDC or USDT that rely on treasury bond interest, Ethena's income comes from its neutral hedging strategy: going long on spot and shorting perpetual contracts.
Ethena earns more revenue when funding rates are higher, which is why many expect Ethena to earn more if the Federal Reserve begins cutting interest rates in late 2025 as predicted.
In fact, after the most recent rate cut in December 2024, Ethena hit a new all-time monthly revenue high of $12 million.
Ecosystem growth and strong indicators
Ethena has quickly emerged as a DeFi protocol with a top TVL ranking, with a current TVL exceeding $6 billion and revenue of nearly $400 million, making it one of the most profitable DeFi projects today.
Three key products are helping the Ethena ecosystem expand
- Ethereal: A decentralized perpetual contract exchange with a TVL of approximately US$712 million.
- Terminal: A liquidity center focused on tokenized assets, with a current TVL of nearly $129 million.
- Strata: Structured income product with a TVL of $13 million.
At the same time, Ethena is working on multi-chain expansion.
USDe’s trading volume on Bybit has surpassed USDC ($540 million vs $444 million)
On the TON network, the TVL of the stablecoin USDe has reached $87 million in just six weeks.
Institutional Capital and Token Buybacks
Recently, Ethena announced a partnership with fund management company StablecoinX. StablecoinX plans to be listed on the Nasdaq exchange with the stock code USDE.
This round of financing attracted participation from well-known crypto VCs such as Pantera, Dragonfly, and Wintermute, with a fundraising amount of US$360 million.
Of this, $260 million will be used to repurchase ENA through the open market over the next six weeks, absorbing nearly 8% of the token's circulating supply.
StablecoinX will permanently include ENA in its balance sheet for long-term holding. This move is intended to reduce the market circulation of the token to help the long-term development of the protocol.
Fee Switch: The Real Catalyst
While the above factors have driven ENA’s rise, the real catalyst has yet to appear, which is the fee switch.
Despite strong market performance, ENA and sENA tokens currently lack a mechanism to directly capture that value.
To address this issue, the Wintermute governance team has submitted a proposal to initiate a fee switch mechanism, which aims to allow token holders to share in the revenue.
This mechanism will enable sENA holders to receive a share of protocol revenue. In other words, it will create real value for token holders, making ENA more than a mere governance token.
To activate the rate switch, Ethena needs to meet 5 conditions. As of July 2025, 4 of the 5 conditions have been met:
- USDe supply exceeds $6 billion
- Cumulative revenue exceeds US$250 million
- 1% of total supply reserve fund
- Spread ≥ 5%
The only remaining condition is to get USDe listed on Binance or OKX (the token is already listed on Bybit, MEXC and Bitget).
Once this final step is complete, the fee switch can be turned on, and sENA holders will begin to receive part of the revenue from the Ethena project.
Based on Ethena's current yield level, coin holders can obtain very competitive yields.
in conclusion
The fee switch is turned on and ENA takes off immediately.
