Ethena Foundation approves proposal to share protocol revenue with ENA token holders, aiming to align growth with rewards.
The Ethena Foundation has approved Wintermute’s proposal to allocate some of Ethena’s DeFi protocol revenue to ENA token holders. The decision, announced on November 15, follows a proposal made by Wintermute on November 6. It suggests that a percentage of Ethena’s fee revenue will be shared with ENA stakers. The Foundation also confirmed that the Risk Committee approved the proposal. It also added that the fee switch parameters would be agreed upon before November 30th.
Such a decision is considered a positive signal of the protocol’s desire to bring the ENA token holders’ motivation into harmony with the protocol’s development. So far, there has been no clear explanation of how Ethena’s protocol revenue will be allocated, especially for ENA. This uncertainty led Wintermute to propose a new model for sharing the protocol’s revenue with sENA. The goal is to ensure ENA holders benefit from the protocol’s success. As a result, Wintermute’s proposal aims to establish a more transparent revenue distribution system.
The proposal also makes one think about Ethena’s current distribution revenue. More specifically, it aims to clarify whether all the revenues generated from the protocol have been utilized only to improve it. It is essential to maintain the alignment of incentives between token holders and the overall community with the sustainable development of the protocol.
Ethena Considers Future Revenue Sharing Model to Benefit sENA Holders
Wintermute’s proposal raises the question of the gap between the protocol success and reward for ENA holders. To date, sENA holders do not directly receive any value from Ethena’s USDe, although its product has brought substantial revenue. The proposal is intended to create a mechanism to alter this by possibly using some of the protocol’s revenue to fund sENA.
However, the Risk Committee recognizes that implementing the change may still be premature. Therefore, the committee has been charged with specifying a number of phases and factors that will help make the decision. Such parameters can be the total supply of USDe in circulation, the revenues of the protocol, and the dispersion of sUSDe yields relative to market prices.
