Ethena's ENA token surges 43% as fee switch mechanism speculation fuels rally.

Ethena's governance token ENA surged 43% this week, climbing above 50 cents, fueled by speculation about the activation of the fee switch mechanism for staked ENA holders. The fee switch, initially proposed by Wintermute and approved by the Ethena Foundation in November 2024, enables the sharing of protocol revenue with staked ENA holders once specific parameters are met. As of Sunday, several of these parameters have been exceeded, and market flows suggest the APY spread parameter may be met soon, further supporting the token's upward momentum.

Ethena's governance token, ENA, has surged 43% this week, climbing above 50 cents, making it the second-best-performing top 100 token by market value [1]. The rally is driven by speculation about the activation of a fee switch mechanism for staked ENA (sENA) holders. The fee switch, initially proposed by market maker Wintermute and later approved by the Ethena Foundation in November 2024, enables the sharing of protocol revenue with sENA holders once specific parameters are met [1].

As of Sunday, several key parameters have been exceeded, including the USDe circulating supply exceeding $6 billion, cumulative protocol revenue surpassing $250 million lifetime, USDe integration on four of the top five centralized exchanges by derivative volumes, and the reserve fund growing to 1% or more of the USDe supply [1]. The last parameter, tracking the annualized percentage yield (APY) spread, is yet to be met, but market flows suggest it could happen soon [1].

The fee switch mechanism, once activated, will share protocol revenue primarily from mint fees on USDe, Ethena's synthetic dollar, which has an over $6 billion market cap, and other protocol revenue streams [1]. The activation of this mechanism is expected to boost ENA's momentum further.

The overall bullish trend in the crypto market is also contributing to ENA's upward momentum. The protocol's USDe has attracted over $750 million in fresh inflows recently, as noted by CoinDesk early today [2]. Additionally, the USDe stablecoin's annual percentage yield crossed the 10% milestone for the first time this year, making it a more yield-generating asset compared to other cryptocurrencies [2].

Whales continue to accumulate ENA tokens, with Nansen data showing that whales hold 43.6 million ENA tokens, a 14.6% increase over the last 30 days, while exchange balances have fallen to 7.27 billion [2]. The ENA price is targeting a move above the 23.6% retracement level at $0.4841, with its 50-day and 100-day Exponential Moving Averages nearing their crossover [2].

References:
[1] https://www.coindesk.com/markets/2025/07/21/ethena-s-ena-soars-43-what-s-fueling-the-explosive-rally
[2] https://crypto.news/ethena-ena-rallies-whales-pile-yields-top-10-percent/