The Ethena community is currently reviewing a proposal from crypto market maker Wintermute to activate a fee switch within the protocol.
In the Nov. 6 proposal, Wintermute highlighted the lack of clarity regarding the revenue distribution for Ethena’s ENA token. The market maker noted that no clear framework exists explaining how ENA holders might benefit from the protocol’s earnings or if any plans exist to allocate a portion of revenue to these holders.
Wintermute emphasized that Ethena Protocol has established significant, real revenue, signaling product-market fit for USDe—its synthetic dollar stablecoin—which boasts over $2.8 billion in market capitalization. This achievement, Wintermute argues, suggests that sENA token holders should have the opportunity to benefit from the protocol’s growth.
Proposal overview
Wintermute’s proposal advises that Ethena’s Risk Committee consider allocating some of the protocol’s revenue to the staked version of the ENA token, sENA. However, the proposal did not provide specific details on allocating the revenue.
Instead, Wintermute’s proposal urges the committee to create a framework detailing the benchmarks Ethena must meet before enabling revenue distribution. Suggested criteria for these benchmarks include metrics like the circulating supply of USDe, the protocol’s average revenue levels, the spread between USDe’s annual percentage yield (APY) and market rates, and the adoption of USDe on major distribution platforms, such as centralized exchanges.
In addition, Wintermute’s proposal calls for a more precise explanation of Ethena’s existing revenue distribution model. This request is driven by concerns over “dual-class” structures in the crypto industry, where benefits for equity holders 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 revenue has been reserved exclusively for development.
Given the significant impact this change could have on Ethena’s ecosystem, the proposal will need to be approved by a community vote.