The Ethena Foundation, responsible for governance in the Ethena ecosystem, has announced plans to propose the activation of a fee switch for its synthetic dollar protocol, USDe. This initiative is set to redirect a portion of protocol fees to holders of the ENA token, marking a significant development for both the Ethena community and ENA investors.
The proposal to activate the fee switch comes after the Risk Committee successfully met several predetermined success metrics. Initially suggested by Wintermute in November, these metrics included achieving a circulating supply of over $6 billion in USDe, cumulative protocol revenue exceeding $250 million, and the listing of USDe on four of the five largest centralized exchanges based on derivatives trading volume.
As it stands, USDe has demonstrated remarkable growth, boasting a market capitalization nearing $14 billion. This figure reflects an increase of more than 150% in just the past two months, positioning USDe as the third largest stablecoin in the cryptocurrency market, trailing behind USDC and USDT.
In parallel, the ENA token has also experienced a significant upward trend. Over the past year, ENA’s value has surged by an impressive 226%, currently trading at around $0.70. Despite the bullish performance over the year, ENA remains below its all-time high of $1.52. Interestingly, while the price has fluctuated, ENA’s market capitalization recently reached an all-time high of $5.6 billion. This discrepancy between market capitalization and price is attributed to token unlocks, which have affected liquidity and trading dynamics.
Overall, the proposed fee switch activation reflects the Ethena Foundation’s commitment to rewarding its community and enhancing the utility of the ENA token. By redistributing fees generated by the protocol, the foundation aims to strengthen the ecosystem’s financial framework, potentially attracting more users and investors looking for stablecoin solutions.
The upcoming governance proposal will signify an important step towards realizing the full potential of the Ethena platform, as it strategically aligns with the objectives of both the protocol and its community stakeholders.
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