Ethena’s ENA token has been on an absolute tear lately. Its explosion isn’t random – A hot market, huge project news, and a compelling story about tokenizing real-world assets lit the fuse, making everyone from traders to analysts sit up and pay attention.
A bull market is back!
July 2025 brought a fresh wave of excitement to crypto. For once, crypto wasn’t just following the stock market. While tech stocks wobbled, Bitcoin pushed steadily higher.
On top of that, big money started flowing back into crypto ETFs, a clear sign that institutions have been getting serious again.
Ethena’s own perfect storm
Riding this market high, Ethena dropped a series of game-changing announcements that sent ENA soaring.
The biggest bombshell was a $360 million private investment deal for StablecoinX. This brand-new company will hold ENA in its coffers and aims to trade on Nasdaq with the ticker “USDE,” creating a massive bridge between Wall Street and crypto.
A key piece of this puzzle is a monster $260 million ENA buyback program on the open market. The Ethena Foundation will use the fresh cash to gobble up ENA tokens, squeezing the available supply and getting bulls excited.
Confidence is also surging because Ethena’s synthetic dollar, USDe, has ballooned past a $6.12 billion supply. The protocol’s yields are pulling in a ton of cash.
The idea of Ethena becoming a major force in tokenizing Real-World Assets (RWAs) has added even more fuel to the fire. They cemented this by launching the Converge blockchain with Securitize, a giant in the RWA space.
Finally, getting listed on major exchanges like Upbit simply put ENA in front of more eyeballs, pumping up its trading volume and making it easier for anyone to buy in.
The “Fee Switch” flips on for sENA stakers
In a move to give back to token holders, the Ethena Foundation gave the green light to a proposal from Wintermute to turn on a “fee switch.” For a long time, the protocol made a ton of money, but the people staking its governance token, sENA, saw almost none of it. This switch aims to fix that.
The plan gives Ethena’s Risk Committee the power to figure out how to share a slice of the protocol’s revenue with the people staking sENA. They expect to have all the details ironed out by the end of November 2024.
This will give people a real financial reason to stake ENA, not just for voting rights, tying their own success directly to the protocol’s health.
How Ethena’s USDe actually works
Ethena Labs’ USDe isn’t your typical stablecoin. The way it stays stable and generates yield is clever, revolving around a delta-hedging trick and skimming profits from perpetual futures markets.
Instead of being backed by cash in a bank, USDe is a synthetic dollar propped up by crypto assets like staked Ethereum (stETH) and Bitcoin (BTC). The protocol keeps its peg by balancing its books. When you create new USDe, Ethena opens a short perpetual futures position for the same dollar amount. This creates a “delta-neutral” hedge, meaning the portfolio’s value stays locked in, no matter if the crypto collateral’s price goes up or down.
The yield for USDe holders comes from two places –
- Staking Profits – The collateral itself, like stETH, earns rewards just for being staked on its own blockchain.
- Futures Funding – Since Ethena is holding short positions, it collects funding payments from traders, which has historically been a huge source of income.
Dodging risks and the ghost of Terra
The creative design of USDe also comes with its own scary set of risks. The biggest one is “Funding Risk”—what happens if the funding rates go negative and stay there for a long time? To fight this, Ethena built up a reserve fund using a portion of its profits.
“Counterparty Risk” is another headache, because the whole system depends on centralized exchanges. Ethena tries to lessen this danger by spreading its assets across many exchanges and using “Off-Exchange Settlement” (OES) providers. These services hold the assets with third-party custodians, so if an exchange blows up, the funds are safer.
The high yields have everyone whispering about the disaster of Terra/Luna. Supporters insist USDe is different because it’s fully backed by outside assets, not a self-referencing mess like Terra was. But critics are still wary, warning about a potential “death spiral” if a long stretch of negative funding rates bleeds the insurance fund dry.
Ethena’s token supply and chart moves
ENA has a hard cap of 15 billion tokens. The distribution is broken down like this –
- Core Team – 30%
- Investors – 25%
- Ecosystem & Airdrops – 30%
- Ethena Foundation – 15%
Insiders can’t sell for a year, and after that, their tokens unlock gradually over three years.
Looking at the charts, ENA has been a rollercoaster. It hit an all-time high, then crashed hard. Recently, it broke free from a downward trend and smashed through important price ceilings.
Source: TradingView
The floor seems to be around $0.36, with the next wall to break at $0.44. Some traders are betting it could climb toward the big psychological number of $1.00, and even higher if the momentum keeps up.
Regulatory storm clouds are gathering
Ethena’s explosive growth hasn’t been missed by governments around the world. In Germany, the financial watchdog BaFin shut down Ethena’s local operations. They claimed it wasn’t following the new Markets in Crypto-Assets (MiCA) rules and hinted that sUSDe might be an illegal, unregistered security. This forced Ethena to close its German shop and give up on getting a MiCA license there.
Back in the U.S., the new GENIUS Act, which outlaws algorithmic and yield-generating stablecoins, could throw a wrench in USDe’s plans. Because USDe is synthetic and pays a yield, it’s stuck in a regulatory no-man’s-land, with both the SEC and the CFTC likely to take a hard look.
