ENA Climbs to 7-Month High as Binance Listing Fuels $500M Buyback Optimism

Ethena’s ENA Surges to 7-Month High on Binance USDe Listing, $500M Buyback Prospects

Ethena’s governance token, ENA, jumped to its highest level since late January on Tuesday as the DeFi protocol moves closer to activating a fee switch that would share protocol revenues with token holders.

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

Listing USDe on major exchanges is a key prerequisite for enabling the fee switch, which allows Ethena to distribute profits to ENA holders. The protocol recorded $54 million in revenue last month and more than $480 million since its launch in late 2023, 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 major Ethena investor.

Driving Factors Behind Ethena’s Momentum

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

The protocol generates revenue from these derivative-backed assets when perpetual funding rates are positive, passing a portion to USDe holders as yield. Stakers currently earn an annualized 6.5%, surpassing traditional money market funds and DeFi lending rates on platforms like Aave.

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

Additionally, the protocol is expanding in stablecoin issuance. It is launching a native stablecoin for Ethereum scaling network MegaETH and has hinted at participation in Hyperliquid’s upcoming stablecoin offering.