Ethena Labs has been making waves in the cryptocurrency industry, reaching a total protocol revenue of $290.2 million on July 9. This places them among the top stablecoin issuers, trailing only Tether, Circle, and Sky. Token Terminal data reveals that Ethena achieved $100 million in cumulative revenue just 251 days after its launch, making it the second-fastest protocol to reach this milestone.
Traders have been flocking to Ethena to mint and hedge the synthetic-dollar token USDe, resulting in daily fees averaging $3.1 million over the past month. The protocol’s core income is generated through a delta-neutral strategy that involves carrying long spot and short perpetual futures positions across multiple exchanges. This strategy converts funding-rate spreads into protocol earnings, which are then credited to stakers of the yield token sUSDe.
Ethena’s backend Treasury data shows that 94% of backing assets are held on centralized venues, where an automated execution system balances collateral and hedges in real time. The remaining collateral is invested in liquid-staking tokens to capture staking rewards while maintaining a neutral net exposure. Additionally, the protocol redirects 20% of gross fees to buy ENA on the open market, burning 58 million tokens since February.
Recently, Ethena’s General Counsel, Zach Rosenberg, and attorneys from Morrison Cohen met with the US Securities and Exchange Commission’s (SEC) Crypto Task Force to seek clarity on the status of “synthetic dollars” like USDe. They argued that USDe functions as a payment instrument rather than a security, citing the fact that holders do not rely on the issuer’s efforts for profit and that redemption rights track underlying reserves, not the issuer’s balance-sheet performance. Ethena urged the commission to treat synthetic dollars as a separate class and to coordinate with bank regulators if a federal licensing lane for payment stablecoin issuers is established.
Despite their success, Ethena remains barred from US retail distribution pending formal guidance from the SEC. New dollar inflows primarily come from offshore funds and market-making desks that hedge their exposure on centralized exchanges. The protocol experienced a slowdown in revenue growth in May when average perpetual funding spreads compressed, but fee intake rebounded to $3.8 million per day in early July as the basis returned to double-digit territory.
Ethena’s request for formal SEC feedback is still under review, according to the meeting log. As the cryptocurrency landscape continues to evolve, Ethena remains at the forefront of innovation and regulatory discussions in the industry.