The Ethena community is currently reviewing a proposal from crypto market maker Wintermute to enable a fee change within the protocol.
In the November 6 proposal, Wintermute highlighted the lack of clarity regarding the revenue distribution of Ethena’s ENA token. The market maker noted that there is no clear framework explaining how ENA holders could benefit from revenue from the protocol or if there are plans to allocate a portion of the revenue to these holders.
Wintermute highlighted that the Ethena protocol has generated real and significant revenue, signaling product market fit for USDe, its synthetic dollar stablecoin, which boasts a market capitalization of over $2.8 billion. According to Wintermute, this achievement suggests that SENA token holders should have the opportunity to benefit from the growth of the protocol.
Proposal Overview
Wintermute’s proposal advises Ethena’s risk committee to consider allocating a portion of the protocol’s revenue to the staked version of the ENA token, sENA. However, the proposal did not provide specific details on the allocation of revenue.
Instead, Wintermute’s proposal urges the committee to create a framework detailing the criteria Ethena must meet before allowing revenue distribution. Suggested criteria for these benchmarks include metrics such as circulating supply of USDe, average protocol revenue levels, spread between USDe annual percentage yield (APY) and market rates, and the adoption of USDe on major distribution platforms, such as centralized exchanges.
Additionally, Wintermute’s proposal calls for a more precise explanation of Ethena’s existing income distribution model. This demand is driven by concerns about “dual-class” structures in the crypto sector, where shareholder benefits may conflict with the interests of token holders or the protocol itself.
The proposal seeks to determine whether such a structure exists within Ethena and whether the protocol’s revenues have been earmarked exclusively for development.
Given the significant impact this change could have on the Ethena ecosystem, the proposal will need to be approved by a community vote.
