Isabella García
On Wednesday, crypto market maker Wintermute introduced a governance proposal to Ethena, seeking to activate a “fee switch” that would allow staked Ethena (sENA) token holders to gain from the protocol’s revenue.
“The Ethena Protocol has consistently generated substantial real revenue, which reflects a strong product-market fit for USDe,” the proposal states. “However, sENA holders are currently disconnected from this growth, as they do not directly benefit from this revenue.”
USDe, Ethena’s dollar-pegged stablecoin, currently holds a market cap exceeding $2.8 billion, while sENA serves as the protocol’s governance token. Wintermute’s proposal suggests allocating a portion of Ethena’s revenue toward sENA holders and associated programs to resolve this revenue disconnection.
Proposal Lacks Specific Allocation Details
Wintermute’s proposal refrained from providing specific allocation percentages or outlining an exact mechanism for the fee switch. Instead, it called on Ethena to examine the “optimal form” of the fee switch, considering USDe’s expanding supply and the yield competitiveness of staked USDe.
Additionally, the proposal asked Ethena’s risk committee to set measurable criteria, such as a certain circulating supply of USDe, protocol revenue benchmarks, and adoption milestones for USDe on major platforms, before activating the fee switch.
Call for Transparency on Protocol Revenue
Wintermute also urged the Ethena Foundation to disclose the historical use of protocol revenue, confirming it has exclusively benefited Ethena. They further requested assurances that future revenue will continue to support the protocol and remain under the governance of ENA and sENA token holders.
Data from Token Terminal indicates that Ethena’s fully diluted market capitalization stands at $4.93 billion, with nearly $150 million in annualized revenue. This new proposal could bring sENA holders closer to the benefits of Ethena’s growing financial success.
