Étienne Girard
The Ethena Foundation announced on Friday that Wintermute’s proposal to modify the Ethena protocol’s revenue-sharing model has been approved by its Risk Committee.
“The Ethena Foundation is pleased to confirm that the Risk Committee has approved Wintermute’s proposal to activate an ENA fee switch,” the foundation posted on X (formerly Twitter). “We will collaborate with the Risk Committee to finalize the parameters for fee switch activation by November 30, followed by the implementation details.”
This decision follows Wintermute’s recent recommendation to allocate a portion of the Ethena protocol’s revenue toward initiatives related to staked ENA (sENA).
Ethena’s stablecoin, USDe, is pegged to the U.S. dollar, while sENA functions as the protocol’s governance token. Wintermute identified a gap in how protocol-generated revenue benefits sENA holders, suggesting that the lack of direct benefit creates a disconnect between sENA holders and the protocol’s growth.
“The Ethena Protocol consistently generates substantial revenue, showcasing clear product-market fit for USDe,” Wintermute stated in its proposal. “However, sENA holders do not benefit from this revenue, which presents a misalignment between governance token stakeholders and protocol success.”
Ethena Foundation’s Commitment to Transparency
In response to Wintermute’s recommendations, the foundation affirmed its commitment to transparency and governance-driven decisions. The foundation pledged that all future protocol revenue will exclusively benefit the protocol itself and not be diverted to external development service providers, including Ethena Labs.
The foundation further clarified that revenue allocation for purposes outside sUSDe rewards or the Reserve Fund would be subject to governance approval.
Additionally, Wintermute urged the foundation to disclose historical revenue allocations to confirm that they have solely benefited the protocol. The firm also requested assurance that future revenue will continue to serve the protocol’s interests under the governance framework of ENA and sENA.
Industry Backing for Ethena
Ethena, backed by notable investors like Binance Labs, Fidelity Investments, and Dragonfly, has drawn industry attention for its innovative approach to stablecoin and governance token dynamics. Wintermute, a prominent crypto market maker and Ethena supporter, aims to strengthen the ecosystem by aligning revenue distribution with stakeholder incentives.
As the November 30 deadline approaches for fee-switch parameter finalization, the Ethena community is closely watching how these changes will shape the protocol’s future governance and economic structure.
