ENA: Still a Trillion Dollar Opportunity
Ethena has generated $1.04B in yield since launch, $284M of it in the past 12 months during sub-optimal market conditions. So far, ENA holders have received $0 of it.
But on September 2, holders gained a path to that yield. Governance passed the fee switch: once the 14-day average USDe supply crosses $7.5B, 95% of the revenue routed through the switch buys ENA on the open market.
Today USDe stands at $4.75B, still 58% below the threshold. We argue it crosses within the next 3–6 months, driven by three catalysts:
- Equity perps: a basis book paying 15-20% funding, uncorrelated with crypto market conditions
- Crypto perps: funding recovered from negative territory and is trending toward the +8% levels
- Improved distribution: Ethena Pay, a TRON deployment, and CEX collateral integrations all bring USDe to new potential holders
Source: defillama.com/stablecoin/ethena-usde
At its current valuation of $1.43B, ENA trades at roughly 5x the fees the protocol collected in its worst year. Once the fee switch is triggered, that changes: the fee engine Ethena has been building for two years starts paying ENA holders directly.
Three Key Catalysts
1. Equity perps
As of late August, equity perps reached about $6.2B of open interest across major venues, roughly 10x the March level. Funding on those positions averaged about 14% annualized on Hyperliquid and 17.5% on Binance in recent months, against 4-7% on ETH and BTC. Crucially, equity funding is uncorrelated with crypto funding: this is a yield source that pays regardless of whether crypto is in a bull or bear market.
Source: https://ethena.fi/blog/extending-the-basis-trade-to-equities
On August 28, Ethena announced it will extend USDe backing to equity perpetual basis trades, with first partner exchange deployments expected in the coming weeks. Ethena expects RWA perpetuals to eclipse crypto allocations (13% of backing today) within 12-24 months.
If RWA perps eclipse the crypto book at 15-20% funding, that is +2-3% on blended yield. If the sleeve eventually scales to half the backing, the equity leg alone contributes 8-10% sustained yield.
More importantly, the potential behind equity perps is far larger than that of crypto perps. Global equity capitalization reached $166.5T in July 2026, versus about $2.2T for crypto. Based on Ethena's own projection: equity perps could grow to $4T of open interest, roughly 40x the peak crypto perp book of $110B. It is the same basis trade, just orders of magnitude larger. Naturally, a $4T market would not pay 15-20% forever (funding compresses as more capital enters) but the depth is the point.A bigger, uncorrelated yield engine is what pulls USDe supply toward the $7.5B threshold and the fee switch that comes with it.
Source: https://ethena.fi/blog/extending-the-basis-trade-to-equities
2. Crypto funding rates recovered
Crypto funding rates on Binance spent February-April 2026 in negative territory, with ETH averaging -4.0% in February, the weakest month since 2023. During this time, Ethena reallocated their backing from basis trading to a variety of DeFi lending, liquid stables, institutional lending, and RWAs (until recently, only 1% of USDe backing was basis trading). Although these sleeves yielded less than crypto basis did in 2024, they provided a sustained 4-5% yield for sUSDe holders when funding did not pay.
Source: coinglass.com/FundingRate
Fast forward to now, BTC is at $80K and funding is positive again, and funding rates averaged +5.7% on ETH and +7.3% on BTC in August. As the market continues to reheat, Ethena should be shifting more of their book toward crypto basis again to rerun the 2024-25 playbook that saw USDe hit $15B supply.
Important to note: Ethena's crypto basis trading has now proven to be lindy, having survived historic liquidation events like 10/10 and other general poor market conditions while other smaller competitors disintegrated.
3. Distribution: TRON launch, CEX collateral
Yield does not grow USDe by itself. People need a venue to buy it and a reason to hold it.
Traders can now post USDe as margin on Bybit and Binance, and hold it on Bybit, OKX, Bitget, and Binance. Coinbase and Robinhood already take it in product (Coinbase vault, Robinhood Earn). USDe also launched on TRON on 11 September, the chain that already moves the most stablecoin volume. Note that chain expansions are pivotal when the chain actually matters and growth strategy is done right (see USDe hitting $300M on Robinhood very soon after launch).
On September 1, Ethena launched Ethena Pay (@EthenaPay), spearheaded by @gdog97_ and @litocoen. Balances earn up to 6% for holding USDe and 5% in AVAX cashback on all spending, which makes Pay a perfect retail hook into USDe. Onchain card volume was $632K between 1-9 September, with daily spend up from $16K to $61.6K. This is still a beta (a few hundred non-US/EU users at launch), but it is the first time a normal user can hold USDe, earn on it, and spend it on a card.
Given the success of EtherFi and Plasma's crypto card product and Ethena Pay's generous rewards (powered by @avax), this stands to be one of the standout products that moves USDe toward the $7.5B mark.
The Fee Switch
Once the catalysts above push USDe through $7.5B supply, the fee switch turns on. A cut of Ethena’s revenue starts buying ENA on the open market. The cut is 5% of revenue at $7.5B, 10% at $10B, 15% at $15B, and 20% at $20B. Almost all of that cut (95%) goes to buybacks.
Buybacks scale with how much the USDe reserve book earns. Protocol yield is the rate Ethena makes on the assets behind USDe, so the formula is:
USDe supply × protocol yield × fee-switch cut × 95%
At 6% protocol yield, the buyback tiers look like this:
| USDe supply | Share of revenue | Buybacks per year | % of today’s $1.43B mcap |
|---|---|---|---|
| 7.5B| 5% | ~$21M | 1.5% |
| 10B | 10% | ~$57M | 4% |
| 15B | 15% | ~$128M | 9% |
| 20B | 20% | ~$228M | 16% |The first tier is small, but at $10B and $15B (USDe already printed $15B once in 2025) are the ones that matter. 4% and 9% of today’s market cap, every year, spent buying the token.
Risks and things to watch out for
- October 5 unlock: All token unlocks for VCs have been compressed to October 5. This is estimated to be 14% of circulating supply, roughly $200m at the current price, 17 months ahead of the original vesting schedule. The Ethena Foundation announced that they bought the locked tokens of the large seed investors who had sold ENA after 10 October 2025. This dampens the supply pressure from the massive unlock event, but investors should still be wary.
- Funding turns negative: if the broader market stalls and crypto perps fundings turns negative again, USDe reserves will again shift toward non-basis trading destinations that yield lower (4-5%). This dampens demand for holding USDe, especially for sUSDe and PT loopers.
- Equity perps stay small: if the deployment of equity perps is delayed, OI shrinks, or equity perp funding falls to crypto rates, then new non-crypto-correlated yield source is much less effective. Blended sUSDe yield stays in the mid-single digits, and that is a weaker reason to mint USDe up to $7.5B.
- Lending or credit hit: a large share of reserves sits in DeFi lending (i.e. Aave, Morpho) and institutional credit (i.e. Maple, FalconX). An exploit or a failed borrower can haircut backing and pause mints.
- Supply never clears $7.5B: if USDe supply is still under the threshold throughout 2027, then the fee switch never gets turned on and ENA stays a governance token.
Conclusion
The fee switch turns on once USDe supply holds above $7.5B. There are three new catalysts that can get it there: equity perps, crypto funding flipping positive, and new distribution channels to buy and hold USDe (TRON, CEX collateral, Ethena Pay).
When @0xENAS published “Ethena: The Trillion Dollar Crypto Opportunity” in October 2024 (now deleted sadly), the opportunity was the stablecoin market plus the crypto basis trading that pays USDe’s yield. That market is larger now and with better distribution.
Everything in this article is a bet that our stated catalysts move USDe supply back to $7.5B and beyond. If you don’t believe that, don’t own ENA. If you do, you know what to do.