Ethena’s synthetic dollar, USDe, has hit a $10 billion market cap in just 500 days. The move cements its position as one of the fastest-growing stablecoins in crypto history.
However, there remains skepticism about USDe, with some analysts suggesting it may be the UST of this cycle.
Ethena and USDe Stablecoin’s $10 Billion Milestone Sets Stage for Next Growth Phase
Ethena broke $10 billion in TVL (Total Value Locked) on Sunday, nearly doubling in less than a month. The past week marked one of Ethena’s highest fee-generating weeks to date, and the protocol has generated over $475 million in fees.
The supply has doubled in the past month alone, a trajectory that has investors eyeing a potentially explosive next phase.
According to analyst Crypto Stream, ENA, Ethena’s governance and protocol token, may be on the verge of unlocking a powerful new revenue engine. Four of five governance-mandated conditions for activating Ethena’s fee switch have already been met.
Ethena’s governance framework outlines strict thresholds for fee distribution activation:
USDe supply above $8 billion — met.
Protocol revenue above $25 million — met, now over $43 million.
Reserve Fund at least 1% of supply — met.
sUSDe APY spread within the 5.0-7.5% range — met, currently around 10%.
USDe integration on three of the top five derivatives exchanges — not yet met.
The analyst says this paves the way for protocol revenue to be distributed to ENA holders. The final hurdle is a listing on either the Binance or the OKX exchange.
“Fee switch turned on: Ethena is a revenue monster. At some point, revenue will be funneled into ENA,” Crypto Stream posted, calling ENA their largest spot position.
OKX and the Binance exchange remain the missing integrations. Regulatory issues under the EU’s MiCA (Markets in Crypto Assets) framework initially blocked Binance from listing USDe.
Still, off-boarding EU users earlier this month may clear the path for a global USDe listing on popular exchanges.
Converge Could Transform Ethena Into a Yield Powerhouse
While the fee switch would mark a major milestone, some see an even bigger prize ahead. Analyst Jacob Canfield pointed to Ethena’s long-term plan to launch its blockchain, Converge, with ENA as the protocol token.
In this model, ENA holders could stake tokens to validators and earn a percentage of transaction value. This would turn ENA into a yield-bearing asset tied to the network’s economic activity.
Meanwhile, Ethena’s roadmap goes beyond crypto-native growth. Crypto Stream highlighted the planned Nasdaq listing of StablecoinX (TCO) in Q4, potentially giving institutional investors direct exposure to Ethena’s ecosystem.
Circle’s past success with USDC demonstrates significant demand for regulated stablecoin vehicles from traditional finance (TradFi).
Meanwhile, Arthur Cheong, founder of DeFiance Capital, believes that large funds have underestimated Ethena due to its token unlock schedule.
“You guys simply have no idea how many funds… casually dismissed $ENA with one simple reason of ‘too many unlocks’ and ignored the potential growth ahead and the tier S execution of the team,” Cheong said.
However, despite all that, Ethena’s meteoric rise has drawn comparisons to Terra’s ill-fated UST, which collapsed in 2022.
It follows USDe becoming the third-largest stablecoin following the passage of the GENIUS Act. Critics warn that synthetic stablecoins face inherent fragility, especially in stressed market conditions.
However, Ethena’s founder, Guy Young, has countered by pointing to integrated risk controls and diversified DeFi collateral designed to mitigate de-pegging risks.
If Binance or OKX integration of USDe stablecoin occurs and the fee switch activates, Ethena could see protocol revenue redirected to ENA holders just as macro tailwinds align.
In such a scenario, lower Federal Reserve (Fed) rates, historically inversely correlated with crypto funding costs, could boost Ethena’s profitability.
The pieces may fall into place amid growing USDe adoption, a growing reserve, and the looming Converge chain.
As of this writing, Ethena was trading for $0.7759, up by over 3% in the last 24 hours.
The post Why Analysts are Calling Ethena (ENA) the Biggest Altcoin Bet This Cycle appeared first on BeInCrypto.
