Ethena Launched $ENA Token and Kicked off 2nd Incentives Program

Reported by The Defiant, Ethena Labs has become the fifth-largest stablecoin issuer by market capitalization hours after the launch of its ENA token.

Ethena Labs has airdropped 750 million ENA tokens, or 5% of the total supply, to early adopters, amassing a $1 billion market cap in the process. Its USDe synthetic dollar also has a market cap of over $1.6 billion.

Tuesday’s much awaited airdrop comes after six weeks of Ethena’s Shard Campaign, or points system, which began on Feb. 19. The campaign incentivized traders who posted collateral in exchange for future distribution of ENA. Those users are now able to cash out.

ENA is now available for trading on Binance, Bybit, Kucoin, and a number of other exchanges.

Ethena Labs’ has touted the token as a core component to its governance structure, and the beginning of the protocol’s move towards decentralization. The 5% distributed today belongs to the overall 30% allocated to Ecosystem Development.

April 2 marks ENA’s airdrop but also the kick-off to a second phase of Ethena’s incentives program, which it calls its Season 2, or “The Sats Campaign.” In this phase, the project will onboard Bitcoin as collateral for the protocol, in addition to Lido’s stETH.

Bringing BTC into the Ethena ecosystem will open the gates for Bitcoin perpetual futures, unlocking roughly $25 billion of open interest to delta hedge, wrote the team today. The $25 billion represents a 2.5x increase on the current size of ETH perpetual futures.

Delta hedging is an options trading strategy that aims to reduce the directional risk associated with price movements in the underlying asset by taking an opposite position.

Ethena’s team explained that with year-to-date funding on Bitcoin reaching 22% on $25 billion, this should translate to roughly $2.75 billion in annual gross cash flow, thanks to half of open interest getting paid to short sellers.

USDe, Ethena’s synthetic stablecoin, backs the token that is pegged to $1, with staked Ethereum, while also hedging stETH with short ETH positions on centralized exchanges. Both stETH and short positions contribute to yield that’s passed on to stablecoin holders.

The Sats Campaign will run for five months, until Sept. 2, or until USDe supply reaches $5 billion. It currently sits at $1.6 billion, and will also benefit participants in Season 1 through boosted rewards.