Ethena’s ENA Hits 7-Month High as Binance USDe Listing Sparks $500M Buyback Expectations

Ethena’s governance token, ENA, surged Tuesday to its strongest level since late January, as the decentralized finance (DeFi) protocol moved closer to activating a fee switch that would share protocol revenues with token holders.

ENA reached $0.87 in early trading, up 8.3% over 24 hours and more than 20% over the past week, according to CoinDesk data. The rally followed Binance’s announcement that it will begin trading Ethena’s $13 billion yield-generating token, USDe, on its platform starting Wednesday.

Listing USDe on major exchanges is a key requirement for Ethena to enable the fee switch mechanism, which allows the protocol to distribute profits to ENA holders. The protocol generated $54 million in revenue last month and over $480 million since its late-2023 launch, according to Token Terminal.

“With the Binance USDe listing, the ENA fee switch is going to get turned on. That unlocks $500 million of buybacks,” said Arthur Hayes, BitMEX co-founder and prominent Ethena investor.

Recent Catalysts for Ethena

Ethena’s momentum extends beyond the Binance listing. The USDe token’s market cap has jumped from $5.5 billion in mid-July to nearly $13 billion, fueled by investors seeking yield. Marketed as a “synthetic dollar,” USDe is backed by Bitcoin (BTC), Ether (ETH), and Solana (SOL), paired with an equivalent value of short perpetual futures positions.

This strategy generates revenue from backing derivatives when perpetual funding rates are positive, with a portion passed on as yield to USDe holders. The token currently offers a 6.5% annualized yield for stakers—higher than traditional money market funds and DeFi lending rates on platforms like Aave.

Ethena is also tapping into the digital asset treasury trend gaining traction in traditional markets. StablecoinX and TLGY, two firms planning a Nasdaq listing, recently raised $530 million to acquire ENA tokens as a public investment vehicle.

Additionally, Ethena is expanding its role in the stablecoin issuance space. The protocol is launching a native stablecoin for Ethereum scaling network MegaETH and has signaled plans to participate in the upcoming stablecoin from derivatives exchange Hyperliquid.