Well, it looks like the Ethena Foundation has finally hit a pretty significant mark. After what seems like have been months of waiting, the protocol has met the fee switch parameters that were laid out by its Risk Committee. I think this is a big deal because it means they can start moving toward sharing some of the protocol’s revenue directly with the people holding ENA tokens.
What This Actually Means for Holders
For a while now, staking ENA—turning it into sENA—was mainly about qualifying for airdrops. That changes now. The fee switch getting the green light means stakers might start seeing an annualized yield. The numbers being talked about are somewhere between 4.5% and 15%. It’s not a guarantee, of course, but based on the protocol’s current fee generation, which is reportedly between $50 to $60 million a month, that could translate into a meaningful distribution across the over $750 million in staked ENA.
And there’s more to it. The foundation also mentioned unlocking around $500 million for buybacks. That could potentially create some upward pressure on the token’s market price, which is always something holders keep an eye on.
The Road to Getting Here Wasn’t Simple
This fee switch wasn’t just triggered overnight. The Risk Committee set some pretty high bars. One was for the total value locked in the protocol to hit a certain level—and it did, reaching a record of over $13.2 billion. Another condition was for the supply of its synthetic dollar, USDe, to exceed $6 billion. Well, it blew past that, more than doubling it with a market cap sitting at roughly $13.7 billion. They also needed cumulative revenue to hit $250 million.
Perhaps the trickiest part was getting USDe listed on four of the top five centralized exchanges by derivatives volume. The recent addition to Binance seems to have checked that final box. So all the conditions are met. Now it’s just down to the technical governance process: the committee signs off, a proposal goes to a community vote, and then, presumably, it gets implemented.
The Market’s Reaction Was… Interesting
You’d think news like this would give the token price a nice bump. But that’s not what happened. Almost immediately after the announcement, ENA’s price actually dropped, sliding about 6.5% to hover around $0.70. It’s a bit counterintuitive.
Looking at the data, it seems like a classic case of long positions getting squeezed. Open interest is still high, around $1.10 billion, with a heavy majority of traders holding long positions. But a relatively small number of shorts have been paying high fees to bet against the token, expecting a drop. In the past few hours, millions in long positions were liquidated, which likely contributed to the sudden price dip.
So while the long-term utility and value proposition for ENA seem stronger than ever, the short-term market mechanics are playing their own game. It creates this weird tension where the fundamentals are improving, but the price action tells a different story—for now, anyway.
