ENA’s Rise: The Next Mainstream Stablecoin or Just a Flash in the Pan?
We’ve analyzed stablecoins many times before. Since regulatory clarity began to emerge, stablecoins have remained the absolute focus of both the crypto market and the broader financial world. They’ve evolved from being mere “auxiliary tools” in crypto to becoming indispensable infrastructure — whether it’s for payments, cross-border transfers, or liquidity support in DeFi, they are simply unavoidable.
As for Ethena (ENA), it’s a newly discovered stablecoin project whose rise has been remarkably fast. Some market voices even claim that ENA could become “the next USDT or USDC.”
Is it really that extraordinary? Its model, metrics, and narrative do look enticing, but behind the hype — are we seeing sustainable growth, or just short-term capital fireworks? This article takes a third-party perspective to break down ENA’s value logic and potential risks.
Why Did ENA Suddenly Catch Fire?
If you’ve been active on Crypto Twitter recently, you might have noticed ENA everywhere — in KOL recommendations, trader strategy discussions, and even institutional reports. The immediate catalyst for this visibility was StablecoinX announcing a $360M funding round, along with a $260M ENA token buyback (around 8% of current circulating supply) over the next six weeks.
Simply put, a massive and sustained buying force appeared in the market. For any asset, that’s bullish — let alone in crypto’s volatile liquidity environment, where short-term sentiment can ignite instantly.
However, ENA’s hype isn’t just because “someone is buying.” What really draws attention is its unique stablecoin model, substantial protocol revenue, and the upcoming fee switch mechanism — once triggered, ENA holders will directly receive a share of protocol revenue. In effect, it puts the profit rights of a stablecoin platform directly into the hands of token holders.
What’s Special About ENA’s Model?
Ethena’s core product is USDe, a synthetic on-chain USD stablecoin. Instead of relying solely on bank deposits or overcollateralization, it uses a delta-neutral strategy to maintain dollar value:
Allocate capital into volatile assets like ETH
Open opposing positions in perpetual futures markets
This way, regardless of price moves, the total value remains stable
Along the way, this setup earns funding rate income, ETH staking rewards, and tokenized Treasury yield. Ethena distributes 80% of this income to USDe holders, while keeping the remaining 20% in the protocol treasury as a long-term growth fund.
This allows Ethena to offer stablecoin holders a relatively high APY (often beating many DeFi lending platforms in a bull market), while also building steady cash flow for itself. This dual benefit is why many call it “Stablecoin 2.0.”
Key Catalyst: StablecoinX Funding + Buyback
The recent ENA rally hinges heavily on StablecoinX’s moves:
Funding amount: $360M
Buyback amount: $260M (≈ 8% of circulating supply)
Execution: 6 weeks, ~$5M daily purchases
This buyback not only creates immediate buying pressure, but also changes ENA’s token release schedule: net issuance over the next year drops from 41.6% to 34.6%. In token economics, a lower release rate means less sell pressure — an immediate price support.
This strategy is reminiscent of MicroStrategy (now renamed Strategy) — using capital operations and market storytelling to amplify token value expectations. While this helps short-term price action, long-term sustainability depends on revenue growth and ecosystem expansion.
Revenue & Value Accumulation Mechanism
Ethena’s protocol income comes mainly from:
Perpetual funding rates (often strongly positive in bull markets)
ETH staking rewards
Tokenized Treasury yield (e.g., on-chain bond products like BUIDL)
In the past 12 months, Ethena generated $307M in revenue, with $405M in total cumulative revenue. In DeFi terms, that’s substantial — outpacing even some established DEXes and lending platforms.
More importantly, once the fee switch is enabled, a portion of this income will be distributed to sENA stakers (ENA holders who stake their tokens). Under conservative scenarios — no revenue growth and only 10% distribution — the annualized yield could still exceed 4%. In a high-growth bull market with higher distribution, it could reach double-digit APYs.
For ENA, this adds real cash flow value to the token — not just speculative appeal.
Ecosystem Expansion: From Stablecoin to Multi-Product
Ethena isn’t content to remain just a stablecoin issuer. It’s actively working on several new growth drivers:
Converge Chain: A Layer 2 built on Arbitrum, hosting a native decentralized derivatives exchange and other dApps — diversifying revenue sources
USDtb: A compliant stablecoin launched with Anchorage Digital, targeting the U.S. market and adhering to the GENIUS Act — positioned to attract institutional capital
Strategic partnerships & cross-chain expansion: Increasing USDe liquidity and utility to strengthen ecosystem stickiness
The strategy is clear: build a self-sustaining ENA/USDe ecosystem, with value derived from multiple business lines, not just one product.
Risks That Can’t Be Ignored
- Heavy Token Unlock Pressure
Over the next 12 months: $500M+ in private sale tokens and $640M in team/early contributor tokens will unlock
Additionally, ~$1.1B in “pending” ecosystem funds remain to be allocated — potential future sell pressure - Revenue Highly Market-Dependent
Perpetual funding rates and ETH staking yields perform well in bull markets but could shrink — or turn negative — in a bear market
Ethena has never been through a full bear cycle, meaning the model remains untested under extreme conditions
In short: ENA’s short-term momentum is strong, but whether it can endure multiple market cycles is still uncertain. Its tokenomics rely heavily on capital operations and sentiment in the near term, and on ecosystem maturity and stable income in the long run.
Conclusion: Both Opportunity and Trap
From a third-party view, ENA’s strengths are clear:
Revenue generation is among the best in the stablecoin sector
Buyback + fee switch mechanisms enhance token utility
Active ecosystem expansion, including compliance moves
But its challenges are equally real:
Significant supply unlocks ahead
Revenue tied to market performance
Short operational history, lacking long-term proof
This makes ENA’s investment logic most suitable for two groups:
Short-term traders riding the hype and buyback momentum, and
Long-term believers willing to endure volatility in hopes ENA becomes a next-gen mainstream stablecoin.
For cautious investors, it may be wiser to wait until ENA passes a full market cycle before making a decision.
Ultimately — will ENA be “the next USDC,” or just another fleeting crypto craze? The answer might only become clear in the next market cycle.
