DeFi protocol Ethena’s governance token ENA has surged 43% this week, mountain climbing above 50 cents. Or no longer it’s now the 2nd-very most interesting-performing top 100 token by market rate, narrowly trailing Curve’s CRV, per Coingecko.
The catalyst for the rally is thought about the activation of the cost switch mechanism for Ethena staked ENA (sENA) token holders, in line with Kairos Study.
The rate switch, at the birth proposed by market maker Wintermute and later accredited by the Ethena Foundation in November 2024, allows the sharing of protocol revenue with sENA holders. The revenue essentially comes from mint costs on USDe, Ethena’s synthetic dollar, which has an over $6 billion market cap, moreover to completely different protocol revenue streams, and is shared once assert parameters are met.
These parameters encompass a USDe circulating present exceeding $6 billion, cumulative protocol revenue surpassing $250 million lifetime, USDe integration on four of the head five centralized exchanges by derivative volumes, and the reserve fund rising to 1% or more of the USDe present. Additionally, it calls for widening the spread between the annualized share yield on staked USDe (sUSDe) and completely different benchmarks, comparable to Aave’s USDC.
As of Sunday, the USDe’s circulating present, cumulative protocol revenue, and reserve fund exceeded the thresholds talked about above, in line with recordsdata tracked by Kairos Study.
“ENA is ordinary, where the cost switch parameters have already been established, but require sure thresholds to be met or exceeded for it to be formally activated, by which case sENA holders would be the cost recipients,” Kairos Study said on X.
It added that the closing parameter, tracking the APY spread, used to be yet to be met, with market flows suggesting it might most likely happen soon.
“The inflow of staked sUSDe vs completely different key benchmarks adore Maker/Sky’s sUSDS signal that capital allocators rely upon the spread to widen in Ethena’s favor,” it notorious.
With the exception of the aptitude rate switch activation, the general bullish vogue within the crypto market is adding to the ENA token’s upward momentum. The protocol’s USDe has attracted over $750 million in modern inflows fair as of late, as notorious by CoinDesk early as we narrate.
Read more: Ethena’s ENA Soars 20% as Protocol Sees $750M Inflow Amid Rising Crypto Funding Rates
