Ethena is preparing to activate the ENA fee structure, subject to final approval from its Risk Committee and a subsequent vote by token holders, now that predetermined conditions have been met.
These conditions, established in late 2024, require the USDe supply to exceed 6 billion, the lifetime protocol revenue to surpass 250 million, and the integration of USDe on four of the top five centralized cryptocurrency derivatives exchanges.
The Ethena Foundation plans to release detailed implementation information prior to submitting a proposal for approval by ENA holders via a community vote, according to official announcements.
Key Metrics Drive Protocol Economics
USDe revenue is generated through futures funding rates and basis trading, while sUSDe distributes a portion of these earnings to its holders. In its most recent monthly report, Ethena stated that the USDe supply has reached 12.1 billion, the 30-day sUSDe APY (Annual Percentage Yield) is 8.54 percent, the reserve fund contains approximately 62 million USDtb, and integration efforts have succeeded with three out of the five leading centralized exchanges, with two remaining.
The report also highlighted the pending September Pendle principal token maturities and ongoing hedging activities on significant trading platforms. As outlined in the Foundation’s August governance update, these elements are being monitored as activation triggers and risk assessments, including APY comparison against a set benchmark and the size of the reserve fund.
The specifics of how the fee structure will operate are intentionally flexible. The fee-switch parameters stipulate that payouts to *sENA* can involve non-cash methods if direct revenue sharing is not feasible from an operational or legal standpoint. Activation is deliberately scheduled to occur after the success metrics and risk checks are confirmed.
| Annual protocol revenue | Fee share to ENA | Annual fee pool | APR if 30% ENA staked | APR if 50% ENA staked | APR if 70% ENA staked |
|---|---|---|---|---|---|
| $400M | 10% | $40M | 2.5% | 1.5% | 1.1% |
| $400M | 25% | $100M | 6.2% | 3.7% | 2.7% |
| $400M | 50% | $200M | 12.5% | 7.5% | 5.3% |
| $700M | 10% | $70M | 4.4% | 2.6% | 1.9% |
| $700M | 25% | $175M | 10.9% | 6.5% | 4.7% |
| $700M | 50% | $350M | 21.8% | 13.1% | 9.3% |
| $1,000M | 10% | $100M | 6.2% | 3.7% | 2.7% |
| $1,000M | 25% | $250M | 15.6% | 9.3% | 6.7% |
| $1,000M | 50% | $500M | 31.2% | 18.7% | 13.4% |
*Method: APR = Annual fee pool ÷ dollar value of staked ENA.*
*Assumptions: ENA market capitalization ≈ $5.35B at calculation time; fee pool equals revenue × fee-share to ENA; stake participation scenarios at 30%, 50%, and 70% of circulating ENA.*
*Figures are illustrative and exclude costs or implementation frictions.*
This flexibility allows ENA governance to adjust the size, frequency, and mechanisms of the fee structure based on current market conditions, legal advice, and the adequacy of the reserve fund.
Exchange Penetration Critical for Distribution
Binance listed USDe spot trading pairs on September 9th, a move that aids Ethena in meeting its “four out of five” adoption condition as mentioned in its governance report. The Ethena Foundation’s update specifies that USDe is now accepted as collateral on major derivatives platforms used in Ethena’s hedging strategy, improving both basis capture and redemption processes.
The upcoming vote will ask ENA holders to formally approve the implementation details after the Risk Committee has provided its consent. The governance forum outlines the sequencing, with the Risk Committee tasked with continuously assessing the sUSDe APY spread relative to a benchmark, as well as the reserve fund’s health, before distributions are activated, and to share these assessments publicly. These roles and the activation procedures are described in the fee-switch framework.
Revenue generation is a key driver. Positive funding rates and futures basis enhance USDe revenue, while negative or compressed funding diminishes it. Recent market dynamics have been favorable for Ethena’s model.
In late August, Deribit’s weekly derivatives report indicated that BTC funding rates reached monthly highs around the middle of the month, with ETH funding briefly peaking at 0.03 percent in 8-hour periods before falling back.
A month prior, the same report highlighted that funding was moderating from earlier highs but remained generally positive across major cryptocurrencies. These conditions, coupled with the inclusion of a top exchange and increased collateral acceptance, have historically led to improved basis capture for stablecoin models reliant on basis trading.
Cost management and concentration risk require close monitoring. The August governance update mentions upcoming Pendle PT maturities, which could result in sUSDe unlocking and tactical movements that temporarily increase redemption activity or alter exposures related to Aave.
The same update also specifies the reserve fund’s composition and a migration to USDtb for counterparty and liquidity management, offering transparency regarding loss-absorption capabilities before any distribution linked to ENA commences.
Regulatory Landscape Also Key
In the United States, the GENIUS Act was enacted on July 18th, establishing a federal framework for payment stablecoins, including OCC licensing for non-bank issuers, one-to-one reserve requirements, and preemption of state regulations that conflict with federal rules for authorized issuers.
In the United Kingdom, the Bank of England has stated its intention to consult this year on permitting systemically important stablecoins to hold a proportion of their reserves in high-quality liquid assets, with Deputy Governor Sarah Breeden outlining a “multi-money” approach in a September 3rd speech.
Regulatory developments are important for designing distribution mechanisms, given that reserve and custody regulations can impact cash transfers, buybacks, or other strategies that ENA governance may consider.
The broader market context remains supportive. The global stablecoin market capitalization has been near record highs in recent weeks, as indicated by the DefiLlama stablecoins dashboard, a factor that often corresponds with increased liquidity and reduced spreads.
Moving forward, the critical steps are clear: public confirmation of implementation details by the Risk Committee, the Foundation’s release of the implementation framework, and the vote by ENA holders as described in the fee-switch parameters and the August governance update.
Ethena plans to publish the final implementation framework and then request a vote from ENA holders.