ENA's New Era: Institutional Investors Back $890M Treasury Play

StablecoinX and TLGY Acquisition have raised $530 million in additional financing, bringing their total funding to $890 million for the acquisition of digital assets, specifically targeting the ENA token from the Ethena protocol. This capital was secured through a private investment in public equity (PIPE) transaction, with the combined company set to be renamed StablecoinX Inc. The new entity will hold over 3 billion ENA tokens, making it the first dedicated treasury business for the Ethena ecosystem, which issues the USDe and USDtb stablecoins [1]. The PIPE deal was priced at $10 per share, and a portion of the proceeds will be used to purchase discounted locked ENA tokens from a foundation subsidiary [1].

The funding round attracted new institutional investors such as YZi Labs, Brevan Howard, Susquehanna Crypto, and IMC Trading, in addition to returning backers like Dragonfly and ParaFi Capital. This move is intended to strengthen the ENA ecosystem's resilience, deepen liquidity, and support the growth of Ethena's stablecoins [1]. The announcement follows a previously disclosed $360 million PIPE financing and a $260 million ENA buyback program, which were outlined in a July 21 disclosure [1].

Ethena's synthetic dollar stablecoins, USDe and USDtb, are gaining traction in the market. According to Binance Research, USDe became the fastest stablecoin to surpass $10 billion in supply, reaching $12.6 billion in September—achieved in under ten months, significantly faster than Tether’s USDT and Circle’s USDC [1]. Token Terminal data shows that USDe’s supply has increased by 31% in the past month, positioning Ethena as the third-largest stablecoin issuer after Tether and Circle. Cumulative revenue for the Ethena protocol has exceeded $500 million as of August, with recent weekly protocol earnings reaching over $13 million [1].

Ethena's unique approach to stablecoin issuance involves a delta-neutral hedging model, which contrasts with traditional reserve-backed models. The Ethena protocol issues USDe by hedging Bitcoin, Ethereum, and other governance-approved assets using perpetual and deliverable futures contracts, while also holding liquid stables such as USDC and USDT. This mechanism allows USDe to maintain a stable value across varying market conditions [2]. According to the Ethena Foundation, the inclusion of liquid stables enhances the efficiency of the hedging process and potentially safeguards against suboptimal market conditions [2].

The Ethena protocol generates revenue from two primary sources: staked ETH receiving consensus and execution layer rewards, and the funding and basis spread from delta hedging derivatives positions. The funding and basis spread has historically yielded positive returns due to imbalances in leverage demand and supply in the crypto market. However, in the event of deeply negative funding rates, the Ethena reserve fund is designed to absorb the costs [3]. The system employs multiple custodians and diversification strategies to mitigate risks, including smart contract, external platform, liquidity, and counterparty risks [3].

ENA, the governance token of the Ethena protocol, has experienced recent volatility, with a 7% decline in the past 24 hours and a 4% drop in the last three hours. Despite this, the token has surged 57% over the past month and ranks among the top five DeFi assets in yearly growth. The circulating supply of ENA is 6.6 billion, with a market cap of $4.15 billion as of the latest data [4]. The protocol's future development includes the USDtb stablecoin, which is being developed to comply with the U.S. GENIUS Act, signed into law by President Donald Trump on July 18 [1].

Source: [1] StablecoinX expands financing to $890M for Ethena's ENA (https://cointelegraph.com/news/tlgy-and-stablecoinx-secure-530m-pipe-as-ethena-s-usde-becomes-fastest-stablecoin-to-10b-supply) [2] Ethena Overview | Ethena (https://docs.ethena.fi/) [3] USDe Overview (https://docs.ethena.fi/solution-overview/usde-overview) [4] Ethena Price, ENA Price, Live Charts, and Marketcap (https://www.coinbase.com/price/ethena)