Ethena has seen a resurgence, fueled by soaring perpetual funding rates and a bullish crypto market, positioning itself for continued growth in the coming months.

In the wake of Donald Trump’s election win, the crypto market has experienced a significant rally, boosting the popularity of Ethena’s USDe token. Over the past month, USDe has attracted nearly $1 billion in new investments, bringing its market capitalization to $3.44 billion—just 5% below its all-time high of $3.6 billion from July, according to DefiLlama data.

The protocol faced difficulties earlier this year when the crypto market cooled off after its March peak. USDe, a “synthetic dollar” token pegged at $1, uses bitcoin (BTC) and ether (ETH) as collateral, paired with short perpetual futures positions to generate yield. When perpetual funding rates were positive, this strategy generated substantial returns, which were distributed to investors. However, when the funding rates turned negative in August and September, yields fell below the U.S. dollar risk-free rate, leading to a $1.2 billion withdrawal from the protocol.

Now, with the crypto market surging again and Bitcoin breaking new records, Ethena has experienced a revival. The protocol is offering a 29% annualized yield for those who stake their tokens, driven by a significant increase in Bitcoin’s perpetual funding rates.

Ethena’s growth is set to continue with more catalysts in play. Aave, a leading decentralized lending platform, has added USDe as collateral, allowing users to borrow against the token while earning yield. Ethena’s co-founder, Guy Young, predicts that this integration will lead to a significant inflow of USDe into the market, with billions of dollars expected to be locked up in the protocol over the next month. Additionally, two more centralized exchanges (CEXs) are expected to list USDe in the coming weeks.

Ethena also plans to share its protocol revenues with ENA governance token holders. This decision comes after the project’s risk committee approved a governance proposal, initiated by crypto trading firm Wintermute, in early November. Industry expectations are that the regulatory environment for decentralized finance (DeFi) will improve under a Trump administration, potentially driving further growth for Ethena and similar projects.