Wintermute pushes Ethena fee switch proposal for sENA holders

Wintermute, a crypto market maker, has introduced a governance proposal aiming to implement a fee switch for staked Ethena (sENA) holders.

The proposal highlights that while the Ethena (CRYPTO:ENA) protocol has generated significant revenue, sENA holders have not directly benefited from it.

"The Ethena Protocol has and continues to generate substantial amounts of real revenue, indicating a clear level of [product-market fit] for USDe," Wintermute stated.

"Unfortunately, sENA does not directly benefit from this revenue, resulting in an explicit disconnect between sENA holders and the growth of the protocol." adding to the statement.

USDe, Ethena's stablecoin pegged to the U.S. dollar, currently boasts a market capitalisation exceeding $2.8 billion.

To bridge the gap between sENA holders and revenue growth, Wintermute has proposed allocating a portion of Ethena’s revenue to sENA and related initiatives.

While the proposal calls for Ethena's risk committee to consider the "optimal form" of the fee switch, specific details like the percentage of revenue allocation were not provided.

Wintermute emphasised the need for guidelines that factor in USDe's expanding supply and the competitiveness of yields for staked USDe.

The proposal also urges Ethena to set parameters for activating the fee switch, such as USDe's circulating supply, protocol revenue benchmarks, and its adoption across major distribution platforms.

Transparency is another focus, with Wintermute requesting that the Ethena Foundation disclose historical revenue allocations to ensure they have solely supported the protocol.

Additionally, they called for assurances that future revenue will remain within the governance of ENA and sENA.

Data from Token Terminal shows that Ethena protocol has a fully diluted market cap of $4.93 billion and an annualised revenue nearing $150 million.

At the time of reporting, the Ethena price was $0.5034.