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In a bold move aimed at bridging the gap between Ethena Protocol’s revenue and its governance token holders, Wintermute has proposed a fee switch initiative for Ethena’s staked governance token, sENA.
Announced in a governance proposal on Wednesday, Wintermute’s push for the fee switch would allow sENA holders to directly benefit from the revenue generated by the Ethena Protocol,. Notably, Ethena Protocol has demonstrated strong product-market alignment with its U.S. dollar-pegged stablecoin, USDe.
Ethena Grows But There is Much More
Though Ethena’s USDe has now reached a market cap of over $2.8 billion, it is yet to yield a return for sENA stakeholders. Wintermute’s initiative is set to address this disconnect.
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According to Wintermute, the Ethena Protocol has experienced robust growth, yet the revenue generated remains out of reach for those holding sENA tokens. The proposal calls for a structured allocation of protocol revenue, directing a share to sENA holders and related initiatives. However, Wintermute’s proposal stops short of specific financial details, instead urging Ethena’s risk committee to consider what form the fee switch should take, given USDe’s expanding supply and the yields of staked USDe.
Criteria for Revenue Distribution is Under Discussion
Wintermute’s proposal also recommends setting measurable parameters that Ethena’s community and risk committee must meet before the fee switch is triggered. Suggested criteria include tracking the circulating supply of USDe, the protocol’s revenue metrics, and the stablecoin’s adoption on key distribution platforms.
These metrics would enable a data-driven approach to activating the fee switch, ensuring that revenue alignment benefits both the protocol’s growth and sENA holders.
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Transparency is central to Wintermute’s recommendations. They urged the Ethena Foundation to disclose the historical use of its revenue, confirming that it has been deployed to bolster protocol growth.
Additionally, Wintermute seeks assurance from Ethena that future revenue streams will remain dedicated to advancing the protocol and governed by both ENA and sENA holders.
Data from Token Terminal indicates Ethena’s substantial market standing, boasting a fully diluted market capitalization of $4.93 billion and generating nearly $150 million in annualized revenue.
