The Ethena Season 3 airdrop is about to end. In addition to the potential selling pressure after the airdrop, there are also many factors influencing the price, including: the construction of the new public chain Converge, BaFin's prohibition on USDe issuance, and market maker Amber Group's transfer of a large number of ENA tokens.
1. Ethena collaborates with Securitize to create Converge.
On March 18, Ethena announced a partnership with Securitize, focusing on the RWA sector, to build a settlement network called "Converge". The goal is to bring traditional financial funds into on-chain finance, which can be understood as the aggregation of DeFi and TradiFi.
The author believes this move is significantly beneficial for all three parties involved in constructing Converge:
Securitize
Has announced that it will use Converge as the issuance layer for future RWA products. Through this cooperation, it can deeply aggregate the technical support of various projects in the DeFi field.
Ethena
The underlying assets of Converge are preset to be Ethena's products, including the staked version of sENA and stablecoins USDe, iUSDe, USDtb, further enhancing the usage of various products within the Ethena ecosystem.
Related agreements
Pendle, Aave, Morpho, Maple, and Ethereal have all expressed support for Converge. For such DeFi agreements, deepening relationships with Ethena can consolidate stable liquidity in the agreement and enhance the asset liquidity capability of the overall agreement.
However, it is important to note that, according to the currently announced information, in order to facilitate the adoption of traditional financial institutions, the default gas fee for Converge will be the stablecoins USDe and USDtb. ENA will serve as the stake token (sENA) to protect the network as an institutional-grade validator.
The author believes this point is very important to eliminate the past retail investors' expectation that ENA could serve as the native gas token of the Ethena network. In other words, a significant factor supporting ENA's bullish outlook has now been erased. Of course, we still need to understand the subsequent official announcements regarding validator staking ENA for a more complete judgment.
2. The Federal Financial Supervisory Authority BaFin prohibits Ethena from continuing to issue USDe.
On March 21, Ethena released an announcement stating that it has received a rejection from BaFin regarding its application for permission under the MiCAR law, and BaFin will also prohibit Ethena from continuing to issue the stablecoin USDe.
Need to panic about USDe's redemption capability? The author believes we can explore this from these two points:
Ethena's organizational structure
Ethena has emphasized that this ban does not affect the creation and redemption procedures of USDe, and users can still redeem their assets. The reason is that Ethena has different business entities in different jurisdictions, so despite being banned by BaFin in one of them, it can still complete the minting and redemption procedures through other business entities.
Regulatory scope
The strict regulations of MiCAR provide protection for a large number of EU users. The well-known largest stablecoin USDT has not yet obtained permission from MiCAR, but this does not affect its leading position in the stablecoin market. The same applies to Ethena's USDe, which can still provide cooperation and services in other regions. Therefore, a single regulatory action would still find it difficult to shake the USDe, which is as high as 6B.
3. The market maker Amber Group that partnered with Ethena transferred a large amount of tokens to the exchange.
On March 22, according to information from on-chain analyst @Ai姨 , Amber Group has transferred 10.35 million dollars worth of ENA to Binance.
The author believes there are two possibilities for this operation:
Due to the upcoming selling pressure from the third quarter airdrop, advance operations are needed.
As the third quarter of Ethena is about to end this week, the details regarding the related airdrop will be announced, and institutions will complete capital operations in advance to meet hedging needs.
To provide liquidity support for the trading demand of the third quarter airdrop tokens.
After the third quarter airdrop ends, it will inevitably lead to a significant increase in market demand for ENA trading. Relevant market makers need to respond in advance and prepare sufficient liquidity required for trading.
The author tends to favor the second possibility.
Summary
The three events discussed today are enough to profoundly impact retail investors' trading psychology and views on ENA. In addition, the information release regarding Ethena's third quarter airdrop after this week will further exacerbate the volatility of the coin price.
It is worth noting that despite the inevitable large-scale user sell-offs to lock in profits after the airdrop, do not forget that the rewards distributed during the second quarter airdrop were in the locked version of ENA, namely sENA. If this season is the same, then the actual selling pressure will be delayed by another week (based on the unlocking procedure).
For experienced traders, the upcoming price volatility may provide good arbitrage opportunities; for airdrop participants, earnings made with the stablecoin USDe can finally be redeemed.
I hope all the little buddies can harvest good returns from this airdrop!
Additionally, don't forget that Ethereal is conducting a pre-staking event. Several DeFi pools have been newly added to the panel, so if you want to grab the opportunity and participate in the Ethena ecosystem airdrop, remember to join! I will place the link in the top comment.
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※ Ethena code:
eu54u
※ Ethereal code:
R7AH81
(Direct link placed in the top comment)
※ The above content does not constitute investment advice. Users should operate according to their own risk tolerance, DYOR, and participate in the investment market cautiously.
※ The attached image is from Ethena's announcement, Ai Aunty's Binance Square.