Decentralized stablecoin Ethena is set to compete with its centralized counterparts, USDT and USDC. Although there may be initial difficulties, its development is progressing rapidly, creating high expectations within the industry.
Chapter 3: Team and Funding
3.1 Team
Ethena was founded by Guy Yang, drawing inspiration from Arthur Hayes’ blog post. The core team consists of five members.
Guy Young is the founder and CEO of Ethena.
Conor Ryder serves as the research director at Ethena Labs, previously working as a research analyst at Kaiko. He is a graduate of University College Dublin and Gonzaga College.
Elliot Parker is the product management director at Ethena Labs, formerly a product manager at Paradigm. He graduated from the Australian National University.
Seraphim Czecker is the business development director at Ethena. He previously served as the risk director at Euler Labs and an emerging market forex trader at Goldman Sachs.
Zach Rosenberg is the general counsel at Ethena Labs, having previously worked at PricewaterhouseCoopers. He holds degrees from Georgetown University, American University Washington College of Law, American University Kogod School of Business, and the University of Rochester.
3.2 Funding
In July 2023, Ethena completed a $6.5 million seed round led by Dragonfly, with participation from Deribit, Bybit, OKX Ventures, BitMEX, and others.
In February 2024, Ethena secured a $14 million strategic investment led by Dragonfly, with participation from PayPal Ventures, Binance Labs, Deribit, Gemini Frontier Fund, Kraken Ventures, and others. This round valued the company at $300 million.
Chapter 4: Token Economy
4.1 Token Distribution
Total Supply: 15 billion
Initial Circulating Supply: 1.425 billion
Foundation: 15% – allocated for promoting the adoption of USDe, reducing reliance on traditional banking systems and centralized stablecoins, and supporting future development, risk assessment, audits, etc.
Investors: 25% (25% unlocked in the first year, followed by linear monthly unlocking)
Ecosystem Development: 30% – these tokens will be used to develop the Ethena ecosystem, with 5% distributed as the first round of airdrops to users, and the remaining portion supporting future Ethena initiatives and incentive activities. One of these activities is the token launch on Binance’s launchpool, accounting for 2% of the total supply.
Core Contributors: 30% – allocated to Ethena Labs team and advisors, with a 1-year unlocking period of 25%.
After the governance token launch, Ethena will initiate the “Second Quarter Activities” to further expand its token economic model. This activity will focus on developing new products with Bitcoin (BTC) as the underlying asset, expanding the growth potential of USDe, and increasing market acceptance and application scenarios for Ethena.
“Sats Rewards” will be the core of the second quarter activities, aiming to reward users participating in the Ethena ecosystem development. By increasing rewards for early users, Ethena strengthens community engagement and encourages new user adoption. This incentive mechanism demonstrates the importance Ethena places on building a sustainable and active community.
Through a well-designed token economic model and incentive mechanism, Ethena aims to build an inclusive and sustainable DeFi platform, exploring new paths for decentralized finance.
4.2 Token Unlocking
June 2, 2024 – 0.36% unlocked
July 2, 2024 – 0.36% unlocked
August 2, 2024 – 0.36% unlocked
September 2, 2024 – 0.36% unlocked
October 2, 2024 – 0.36% unlocked
April 2, 2025 – 13.75% unlocked (high proportion, requires careful attention)
Chapter 5: Target Valuation
Currently, ENA has a circulating market cap of $1.4 billion and a fully diluted valuation (FDV) market cap of $14 billion. The valuation of stablecoins is generally high. In 2023, the market capitalization of on-chain settlement stablecoins exceeded $12 trillion. Once stablecoins gain market recognition, their value potential is immeasurable. AllianceBernstein, a globally leading asset management company with $7.25 trillion in assets under management (AUM), predicts that the stablecoin market could reach $28 trillion by 2028. This forecast indicates significant growth potential from the current $140 billion market cap (previously reaching a peak of $187 billion).
As for ENA’s valuation, there is no direct benchmark to fully reference. Considering the enormous market size and potential growth of stablecoins, it is challenging to determine a precise valuation. The focus should be on whether Ethena’s solution can address and adapt to the development needs of decentralized stablecoins in the web3 world and effectively mitigate potential risks.
However, Arthur Hayes, the co-founder of BitMEX, attempted to value ENA using a similar model to Ondo. His valuation model is based on allocating 80% of the protocol’s generated revenue to collateralized USDe (sUSDe) and 20% to the Ethena protocol. The formula is as follows:
Ethena Protocol Annual Revenue = Total Revenue * (1 – 80% * (1 – sUSDe Supply / USDe Supply))
If 100% of USDe is collateralized, meaning sUSDe Supply = USDe Supply, Ethena Protocol Annual Revenue = Total Revenue * 20%
Total Yield = USDe Supply * (ETH Staking Yield + ETH Perp Swap Funding)
ETH Staking Yield assumed to be 4%
ETH Perp Swap Funding assumed to be 20%
The key part of this model is using a fully diluted valuation (FDV) based on revenue multiples. Using these multiples as a guide, the potential FDV of Ethena was estimated.
In early March, Ethena’s $820 million in assets generated a 67% yield. Assuming a 50% ratio of sUSDe supply to USDe supply, it is inferred that Ethena’s annualized revenue would be around $300 million after one year. Using a valuation similar to Ondo’s, the FDV is estimated to be $189 billion.
Therefore, ENA’s growth potential is calculated as 189/14, resulting in a coin price of 12.6.
Considering both market size and revenue structure, ENA has significant upside potential, making it worth close attention and investment. In terms of investment strategy, the following chapter provides analysis and recommendations.
Chapter 6: ENA Investment Analysis and Recommendations
As ENA is a coin suitable for long-term investment, one approach is to buy and hold. Another strategy is to time the market, buying and selling opportunistically to profit from short-term fluctuations while maintaining a long-term investment. This chapter focuses on analyzing the second investment approach and provides current investment recommendations using chip distribution and MVRV research.
6.1 Chip Distribution Research
Based on the ENA Dashboard’s URPD chip distribution chart shared by Lin, a VIP member of the 2008 group, the following observations can be made:
Since May 15, chips with prices above 1 have gradually decreased, while a significant chip consensus zone has formed around 0.85, peaking on May 22.
From May 22 onwards, between 0.7 and 1.2, especially around 0.85, nearly one-third of the chips have been removed. However, the consensus zone still concentrates around 0.85, forming strong support. Building positions around this level would be advantageous.
There is no significant chip concentration area above 1, indicating smooth sailing. Once the bull market arrives, the resistance to price increases will be minimal, and the speed and magnitude of the rise will be rapid.
6.2 MVRV Indicator Analysis
Next, let’s examine the MVRV (Market Value to Realized Value) Z-score indicator.
MVRV-Z Score = Circulating Market Cap / Realized Market Cap, where “Realized Market Cap” is based on the value of the coin transferred on-chain, calculated by summing up the “last moved value” of all transactions of that coin on-chain. Therefore, when this indicator is too high, it indicates an overvaluation compared to the coin’s realized value, which is unfavorable for further price increases. Conversely, when the indicator is below 1, it represents an average cost position at a loss for holders, which gives an advantage to those building positions below 1.
When the indicator is above 3, it signifies profits exceeding three times the average cost, entering a risky area, and suggests considering phased profit-taking.
Looking at ENA’s MVRV indicator, it can be seen that since April 14, the MVRV indicator has been concentrated around 1, reaching a low of 0.71. Currently, the Z-score is 1, indicating a favorable time for phased accumulation.
Therefore, the current region is suitable for building positions, and it is even better to accumulate around 0.85 or lower.
Chapter 7: Market Heat
There is significant market attention on ENA, as shown in the following three images:
Although ENA’s price has experienced a correction due to the overall market downturn, market and KOL (Key Opinion Leader) interest in ENA has remained positive. Compared to April, KOL attention to ENA has notably increased in May, indicating the technical advantages and future prospects of ENA.
Chapter 8: Conclusion
ENA (Ethena) makes it possible for the web3 world to have independent currency (stablecoin) issuance and valuation rights. It has enormous growth potential and room for imagination. Based on Lin’s chip distribution and MVRV on-chain data analysis, it is currently a favorable time to accumulate positions in a phased manner with lower risk.
ENA (Ethena) is currently one of the most promising decentralized stablecoin projects. It is hoped that the ENA team will continue to update and iterate, using appropriate technologies and methods to mitigate potential risks.