$260 million in cash will be used to buy ENA on the open market through a subsidiary of the Ethena Foundation.
Written by: Alex Liu, Foresight News
On the evening of July 21, Ethena's native token ENA briefly surged by 20% to reach 0.59 USDT due to the news that 'the treasury company plans to buy $260 million worth of ENA tokens,' setting a new high for the past six months and sparking market discussions. This article will detail the event and ENA's recent performance, analyze its potential impact on the Ethena project and the market, and evaluate the project's current status.
StablecoinX completes financing and seeks NASDAQ listing.
On the evening of July 21, Ethena announced that its subsidiary StablecoinX has reached a merger agreement with TLGY Acquisition Corp, planning to go public by merging and seeking to raise about $360 million in funding. Among them, the Ethena Foundation subscribed for $60 million, and other institutional investors include Dragonfly, Pantera Capital, Galaxy Digital, Wintermute, Polychain, Haun Ventures, etc.
This financing is conducted in the form of PIPE (private placement), with $260 million in cash and $100 million in discounted locked ENA tokens. According to the announcement, this funding will be used to establish a long-term ENA treasury, and the new company StablecoinX plans to invest about $5 million daily to buy ENA on the open market, aiming to accumulate about $260 million worth of ENA tokens in the next six weeks, accounting for approximately 8% of the current circulation.
StablecoinX will not only invest in ENA but also plans to operate technical infrastructure related to the Ethena ecosystem, such as running validator nodes and staking services. After the financing is completed, it will list on NASDAQ under the stock code 'USDE,' while the Ethena Foundation will hold the majority of voting shares.
The Ethena team emphasizes that these tokens will be locked long-term and held permanently, with the Ethena Foundation retaining the right to veto any sales, aiming to support the ecosystem and increase the ENA holdings per share through continuous accumulation.
Recent price performance review of ENA
Before the announcement of StablecoinX, the ENA token had already begun to rise rapidly. On July 20 (Sunday), the overall market rise drove up funding rates, and mainstream assets such as ETH and SOL increased, while previously sluggish Ethena also welcomed capital entry. On that day, ENA surged by 20% at one point, breaking through the 0.5 USDT mark, reaching the highest point since February this year. On the same day, Ethena's 'synthetic dollar' stablecoin USDe also attracted about $750 million in net inflows, with supply approaching a historical record of 6.1 billion. During this round of market movement, Ethena's capital arbitrage strategy began to profit, raising the annualized interest rate of sUSDe to 10%, significantly exceeding traditional money market funds.
Potential impact on the Ethena project
The preparation and listing plan of StablecoinX is of great significance to the Ethena project itself.
Firstly, this is another attempt by a DeFi project to actively connect with traditional capital markets, similar to the previous listings of Circle (USDC) and Ripple's tradable products, all indicating that the stablecoin sector is receiving significant attention from institutions. Ethena aims to provide exposure to traditional stock market investors through a publicly listed company model based on its 'growth story,' which is seen as a signal of integration with traditional finance (TradFi). As the founder of Ethena stated, this transaction provides stock market investors with a pure investment target themed around 'digital dollars.'
Secondly, from the perspective of supply and demand for funds, StablecoinX plans to significantly increase its holdings of ENA and lock them for the long term, which means a strong buyer has entered the project ecosystem. The daily purchase plan of $5 million for the next few weeks, along with a total procurement force of $360 million in cash and locked tokens, will significantly raise the demand for ENA. This model, similar to a 'Bitcoin treasury' (drawing on the logic of holding BTC by Strategy), may provide long-term value support for ENA.
Some opinions suggest that this stable capital allocation strategy can bring substantial user capital demand and, to some extent, raise the long-term bottom value of the token. However, some analyses point out that this capital flow does not directly change the economic model of the Ethena project: Ethena's core mechanism remains that users mint USDe through collateralizing crypto assets and execute hedging strategies to generate returns. The StablecoinX purchase plan will only increase market demand but will not change the operational logic of the Ethena protocol; therefore, whether the project's 'fundamentals' have changed remains to be observed. In the long run, this equates to the project introducing a stable 'bullish ENA' capital party, but if the basic arbitrage model changes (such as a decline in funding rates), the project's return capacity still needs to be tested.
Thirdly, the macro regulatory environment is also changing. Recently, the U.S. has passed several stablecoin regulatory laws, including the GENIUS Act. The GENIUS Act requires stablecoin issuance to have comprehensive asset backing (cash or treasury bonds) and strengthens regulation, prohibiting the issuance of dividend-like yield-bearing stablecoins, reflecting that the stablecoin market has received dual attention from U.S. regulators and traditional finance.
For Ethena, its USDe is classified as a 'crypto-collateralized synthetic dollar,' which may face compliance pressures under the new regulatory framework. If Ethena fully complies with U.S. stablecoin laws, it may need to adjust its hedging strategy. However, the Ethena team's current position is that USDe is not a stablecoin product intended for payments but rather a synthetic asset tool, and therefore it believes it is not directly governed by the new law. In summary, the listing and financing of StablecoinX unfold against the backdrop of increasingly clear compliance environments, which may introduce more compliance considerations for Ethena while also enhancing the project's visibility and legitimacy in mature markets.
Evaluation of the current status of the Ethena project
From the overall project perspective, Ethena is currently in a phase of rapid development. First, the recovery of funding rates has indeed enhanced the attractiveness of USDe. Recently, Ethena's stablecoin strategy, hedged by BTC, ETH, SOL, and other assets, has been able to offer users nearly 10% annualized returns, far exceeding traditional dollar fund levels. This has attracted a large influx of capital, with a net minting amount of about $750 million last week, bringing USDe supply close to historical highs.
Secondly, regulatory and policy trends are worth paying attention to. The U.S. has signed the GENIUS Stablecoin Act, which brings stablecoin issuance under Federal Reserve supervision and requires 100% asset backing. This has had a profound impact on currently mainstream stablecoins (such as USDC, USDT). Ethena's USDe is classified as a crypto-collateralized stablecoin and may need to adjust or obtain exemptions under the new law.
As mentioned earlier, Ethena is in contact with regulators to seek recognition of its synthetic dollar attributes, so that it is not directly constrained by new regulations. However, if Ethena wishes to offer USDe to American investors in the future, it may be required to increase its fiat or treasury reserves. In short, regulatory uncertainty poses certain challenges for the project, especially regarding the compliance pressures that may arise from its high-yield model.
Finally, the project has made progress in integrating with traditional assets. For example, Ethena has launched USDtb (a stablecoin backed by fiat or existing institutional assets) and has allocated some capital to a dollar fund managed by BlackRock. These initiatives have enhanced the product's compliance and institutional recognition to some extent. Additionally, Ethena's recent integration with the Telegram wallet and the launch of lending strategies have also added stickiness to its ecosystem. Nevertheless, Ethena is still a relatively young DeFi protocol, and achieving long-term stable growth will require facing multiple challenges such as compliance, competition, and market volatility.
In summary, StablecoinX's successful financing and the initiation of the ENA treasury plan have brought positive effects to the Ethena project: in the short term, it has boosted token prices and provided appreciation expectations for holders. In the long run, this marks Ethena's attempt to connect its digital dollar theme with traditional capital markets, opening new financing and distribution channels. However, this move has not fundamentally changed Ethena's asset and revenue model; its stablecoin operations still rely on the logic of crypto-collateralized hedging.
Therefore, it is still difficult to conclude whether the project's fundamentals are 'changed': the capital inflow and listing support brought by StablecoinX are undoubtedly a significant advantage, but whether Ethena can continuously prove the robustness of its high-yield mechanism and how it can respond to regulatory changes still requires time and further observation.
