Reported by The Defiant, Ethena Labs has emerged as the fifth-largest issuer of stablecoins based on market capitalization shortly after the release of its ENA token.
Ethena Labs has distributed 750 million ENA tokens, equivalent to 5% of the total supply, to early users, leading to a $1 billion market cap. The project's USDe synthetic dollar has also reached a market cap exceeding $1.6 billion.
After a six-week campaign called the Shard Campaign, which started on Feb. 19, Ethena has rewarded traders who collateralized their assets with the promise of future ENA distribution. These participants are now able to withdraw their rewards.
ENA is currently tradable on various platforms such as Binance, Bybit, and Kucoin.
The team at Ethena Labs has highlighted ENA as a crucial element in its governance system, signaling the project's shift towards decentralization. The 5% of tokens distributed today is part of the total 30% set aside for Ecosystem Development.
April 2 marks the airdrop of ENA and the start of the second phase of Ethena's incentives program, known as Season 2 or "The Sats Campaign." During this stage, Ethena will introduce Bitcoin as collateral alongside Lido's stETH.
The integration of BTC into Ethena's ecosystem will create opportunities for Bitcoin perpetual futures, unlocking around $25 billion of open interest for delta hedging, resulting in a 2.5x growth compared to the current size of ETH perpetual futures.
Delta hedging is a strategy in options trading that aims to mitigate the risk associated with price changes of the underlying asset by taking a contrary position.
Ethena's team mentioned that based on a 22% year-to-date funding on Bitcoin amounting to $25 billion, this could generate roughly $2.75 billion in annual gross cash flow, with half of the open interest being paid to short sellers.
The USDe synthetic stablecoin, linked to $1, is collateralized by staked Ethereum and hedged with short ETH positions on centralized exchanges. Both stETH and short positions contribute to the yield distributed to stablecoin holders.
The Sats Campaign will run for five months until Sept. 2 or until the USDe supply hits $5 billion. Currently standing at $1.6 billion, it will also reward Season 1 participants with enhanced incentives.
