Wintermute Pushes for Ethena Fee Switch to Benefit sENA Token Holders

Crypto market maker and liquidity provider Wintermute has proposed a fee switch framework for the Ethena protocol.

The main objective behind this move is to establish revenue alignment with sENA token holders and clarify Ethena’s protocol revenue structure.

Wintermute’s Fee Switch Proposal

According to Wintermute, sENA holders – those who have staked their Ethena tokens – do not benefit directly from Ethena’s revenue growth despite the protocol’s success with the USD-pegged stablecoin, USDe. The latest proposal, submitted to the Risk Committee on Wednesday, suggests enabling a future revenue allocation to sENA to align token holders with Ethena’s financial performance.

While the proposal refrained from providing specific figures for revenue allocation or a detailed fee-switch model, Wintermute recommended that Ethena focus on establishing the “optimal form” for the fee switch, especially considering the growth of USDe’s supply and yield competitiveness for staked assets.

Wintermute also suggests setting a roadmap with clear milestones – like circulation and revenue targets – before implementing revenue-sharing. To support this, they request full disclosure from the Ethena Foundation on how protocol revenue is currently and will be distributed. Any final decision on the proposed changes would need approval through a vote by ENA and sENA holders.

“We kindly request that the Foundation provide clarity on whether 100% of Ethena protocol revenue has been allocated or retained solely for the benefit of the protocol so far. Additionally, we ask for confirmation that future revenues will continue to be managed within the Ethena protocol, ensuring they benefit the protocol and remain governed by ENA/sENA.”

Ethena’s USDe

Ethena is a synthetic dollar protocol on Ethereum that issues the stablecoin USDe, designed as a scalable and censorship-resistant digital currency pegged to the USD.

This year USDe has gained traction, offering yields up to 17%, which has prompted comparisons to Terraform Labs’ UST, the controversial algorithmic stablecoin that collapsed and sparked a broader crypto crisis over two years ago. However, market experts assured that USDe’s yield mechanism is “unique.”

Currently, USDe’s market cap has grown to $2.83 billion, boosted by a broader crypto market rally.