The Ethena group is at present reviewing a proposal from crypto market maker Wintermute to activate a price change inside the protocol.
Within the Nov. 6 proposal, Wintermute highlighted the dearth of readability relating to the income distribution for Ethena’s ENA token. The market maker famous that no clear framework exists explaining how ENA holders would possibly profit from the protocol’s earnings or if any plans exist to allocate a portion of income to those holders.
Wintermute emphasised that Ethena Protocol has established important, actual income, signaling product-market match for USDe—its artificial greenback stablecoin—which boasts over $2.8 billion in market capitalization. This achievement, Wintermute argues, means that sENA token holders ought to have the chance to profit from the protocol’s progress.
Proposal overview
Wintermute’s proposal advises that Ethena’s Danger Committee contemplate allocating a number of the protocol’s income to the staked model of the ENA token, sENA. Nonetheless, the proposal didn’t present particular particulars on allocating the income.
As an alternative, Wintermute’s proposal urges the committee to create a framework detailing the benchmarks Ethena should meet earlier than enabling income distribution. Recommended standards for these benchmarks embody metrics just like the circulating provide of USDe, the protocol’s common income ranges, the unfold between USDe’s annual share yield (APY) and market charges, and the adoption of USDe on main distribution platforms, equivalent to centralized exchanges.
As well as, Wintermute’s proposal requires a extra exact rationalization of Ethena’s current income distribution mannequin. This request is pushed by considerations over “dual-class” constructions within the crypto business, the place advantages for fairness holders might battle with the pursuits of token holders or the protocol itself.
The proposal seeks to find out whether or not such a construction exists inside Ethena and whether or not the protocol’s income has been reserved solely for growth.
Given the numerous impression this variation may have on Ethena’s ecosystem, the proposal will should be permitted by a group vote.