Binance's USDe Listing Ignites Fee Switch Hopes and ENA Surge

The governance token of decentralized finance (DeFi) protocol Ethena, ENA, surged to a seven-month high following the announcement that Binance, the world’s largest cryptocurrency exchange by trading volume, would list Ethena’s yield-generating token, USDe, on its platform. The price of ENA reached $0.87 in early hours, reflecting an 8.3% increase over the past 24 hours and more than 20% growth over the past week, according to CoinDesk data. This surge coincided with the protocol’s progress toward activating a fee switch, which would distribute protocol-generated revenues to ENA token holders. The fee switch is expected to unlock up to $500 million in buybacks for the token, as noted by Arthur Hayes, co-founder of BitMEX and a notable investor in Ethena.

The listing of USDe on Binance is a significant milestone for Ethena, as it is a key requirement for enabling the fee switch. The protocol has generated $54 million in revenues in the most recent month and over $480 million since its launch in late 2023, according to Token Terminal data. USDe, a $13 billion synthetic dollar asset, is backed by a combination of Bitcoin, Ethereum, and Solana, and pairs them with short perpetual futures positions to generate yield for investors. The token currently offers a 6.5% annualized yield, outperforming traditional money market funds and lending rates on DeFi platforms like Aave.

Binance has also introduced a rewards program for users holding USDe, aiming to incentivize adoption and liquidity. Users who hold at least 0.01 USDE are eligible for daily rewards, distributed across Futures, Funding, Margin, and Spot accounts. In September, rewards will be issued as a lump sum at the end of the month, shifting to weekly payouts starting in October. The listing of USDe on Binance is expected to significantly expand the token’s exposure, drawing attention from traders and investors who view it as a novel and growing DeFi asset.

Ethena has also benefited from broader trends in the DeFi and digital asset markets. The Ethena USDe token’s total value has grown from $5.5 billion in mid-July to nearly $13 billion, driven by investor demand for yield-generating assets. The protocol is also expanding its influence in the stablecoin issuance space, with plans to launch a native stablecoin for Ethereum scaling network MegaETH and potential participation in the derivatives exchange Hyperliquid’s stablecoin offering. Additionally, Ethena is involved in the digital asset treasury vehicle trend, with firms such as StablecoinX and TLGY raising $530 million to accumulate ENA tokens as part of a merger and Nasdaq listing plan.

As Ethena continues to gain traction, analysts suggest the activation of the fee switch could further bolster ENA’s value, given the potential for increased buybacks and revenue-sharing with token holders. While the long-term trajectory of USDe and ENA remains uncertain, the listing on Binance is widely seen as a catalyst for increased liquidity and investor interest in the Ethena protocol.