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, influenced by news of 'the treasury company planning to buy $260 million of ENA tokens,' reaching a six-month high and sparking market discussions. This article will detail this event and ENA's recent performance, analyze its potential impact on the Ethena project and the market, and assess the current status of the project.
StablecoinX completes financing and seeks NASDAQ listing
On the evening of July 21, Ethena announced that its subsidiary StablecoinX had reached a merger agreement with TLGY Acquisition Corp, planning to go public through a reverse merger and aiming to raise approximately $360 million. The Ethena Foundation subscribed for $60 million, with other institutional investors including Dragonfly, Pantera Capital, Galaxy Digital, Wintermute, Polychain, and Haun Ventures.
This financing is conducted in the form of PIPE (private placement), of which $260 million is cash and $100 million is locked ENA tokens at a discount. According to the announcement, this funding will be used to establish a long-term ENA reserve treasury, with the new company StablecoinX planning to invest approximately $5 million in ENA's public market daily, aiming to accumulate about $260 million in ENA tokens over the next six weeks, representing about 8% of the current circulating supply.
StablecoinX will not only invest in ENA but also plans to operate technology infrastructure related to the Ethena ecosystem, such as running validator nodes and staking services. After the financing of StablecoinX is completed, it will be listed 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 for the long term and held permanently, with the Ethena Foundation retaining the right to veto sales, aiming to support the ecosystem through continuous accumulation and increase the ENA holdings per share.
Recent Price Performance Review of ENA
Before the StablecoinX news was released, ENA tokens had already started to rise rapidly. On July 20 (Sunday), the overall market surged, raising funding rates, and mainstream assets like ETH and SOL increased, while Ethena, which had previously been sluggish, also saw capital entering. On that day, ENA surged by 20%, breaking through the 0.5 USDT mark, reaching its highest point since February this year. Ethena's synthetic dollar stablecoin USDe also attracted about $750 million in net inflows, with the supply nearing the historical peak of $6.1 billion. In this round of market activity, Ethena's capital arbitrage strategy began to profit, making sUSDe's annualized interest rate reach 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 of which show that the stablecoin sector is receiving high attention from institutions. Ethena's 'growth story' is offered to traditional stock market investors through the public company model, which is seen as a signal of integration with traditional finance (TradFi). As the founder of Ethena said, 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 long-term, indicating that a strong buyer has entered the project ecosystem. The daily purchase plan of $5 million for the next few weeks, along with a procurement effort of $360 million in cash and locked tokens, will significantly boost demand for ENA. This model, similar to a 'Bitcoin treasury' (drawing on the logic of Strategy holding BTC), may provide long-term value support for ENA.
Some believe that this stable capital allocation strategy can bring substantial user capital demand and raise the long-term bottom value of the tokens to some extent. 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 by collateralizing crypto assets and executing hedging strategies to generate returns. The StablecoinX purchase plan will only increase market demand but will not alter the operational logic of the Ethena protocol, so whether the project's 'fundamentals' have changed remains to be seen. In the long run, this is equivalent to the project adding a stable 'bullish ENA' capital party, but if the fundamental 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 issuances to have comprehensive asset backing (cash or government bonds) and strengthens regulation, prohibiting the issuance of dividend-like income stablecoins, reflecting that the stablecoin market has received dual attention from U.S. regulators and traditional finance.
For Ethena, its USDe belongs to 'crypto-collateralized synthetic dollars,' which may face compliance pressure under the new regulatory framework. If Ethena fully complies with the U.S. stablecoin law, it may need to adjust its hedging strategy. However, the Ethena team's current stance is that USDe is not a stablecoin product for payment purposes but more like a synthetic asset tool, believing it is not directly governed by the new law. In summary, the listing and financing of StablecoinX are unfolding against the backdrop of an increasingly clear compliance environment, which may bring more compliance considerations to Ethena while also enhancing the project's visibility and legitimacy in mature markets.
Assessment of the Current Situation of the Ethena Project
Overall, Ethena is currently in a phase of rapid development. Firstly, the warming of funding rates has indeed enhanced the attractiveness of USDe. Recently, Ethena's stablecoin strategy hedged with assets like BTC, ETH, and SOL has been able to provide users with nearly 10% annualized returns, far exceeding traditional dollar fund levels. This has attracted a large influx of capital, with net minting amounts around $750 million last week, bringing the supply of USDe close to historical highs.
Secondly, regulatory and policy trends are worth noting. The U.S. has signed the GENIUS stablecoin act, bringing stablecoin issuance under Federal Reserve regulation and requiring 100% asset backing. This has had a profound impact on currently mainstream stablecoins (like USDC and USDT). Ethena's USDe is a crypto-asset collateralized stablecoin, which may need to adjust or seek exemptions under the new act.
As mentioned earlier, Ethena is in contact with regulators to seek recognition of its synthetic dollar properties to avoid direct constraints from new regulations. However, if Ethena wishes to provide USDe to U.S. investors in the future, it may be required to increase its fiat or government bond reserve support. In short, regulatory uncertainty poses certain challenges for the project, especially in terms of compliance pressure that may arise from its high-yield model.
Finally, the project has made progress in integrating with traditional assets. For instance, Ethena has launched USDtb (a stablecoin backed by fiat or existing institutional assets) and has invested part of its capital in a dollar fund managed by BlackRock. These measures 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 remains a relatively young DeFi protocol and will face multiple tests in achieving long-term stable growth, including 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: it has raised token prices in the short term and provided appreciation expectations for holders. In the long term, 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, as its stablecoin operation still relies on the logic of crypto-collateral hedging.
Therefore, whether the project's fundamentals are 'changed' remains inconclusive: the funding flow and listing support brought by StablecoinX are undoubtedly a significant positive, but whether Ethena can continuously prove the robustness of its high-yield mechanism and whether it can cope with regulatory changes still requires time and further observation.
