Ethena Labs protocol revenue exceeds $290 million, firmly ranking as the top stablecoin issuer.

According to Token Terminal data, as of July 9, the total cumulative protocol revenue of the synthetic dollar stablecoin USDe issued by Ethena Labs has reached $290.2 million. This impressive achievement places it fourth in the ranking of stablecoin issuers' revenue, behind industry giants Tether (USDT), Circle (USDC), and Sky.

Incredible revenue speed: 251 days to break 100 million, the second fastest in history

Data shows that Ethena Labs took only 251 days to achieve a cumulative protocol revenue of 100 million USD from its launch, becoming the second fastest protocol in the history of the cryptocurrency field to reach this milestone. Its revenue generation speed surpassed the 980-day record set by the decentralized exchange leader Uniswap in 2020, but fell slightly short of the Meme coin launch platform Pumpfun, which broke the 100 million mark in just 217 days at the end of last year.

Core Yield Engine: Delta Neutral Strategy Captures Funding Rates

The core that supports Ethena's high income is its unique yield generation mechanism. The protocol executes a Delta-Neutral Strategy by simultaneously establishing long positions in spot markets and short positions in perpetual contracts across major exchanges. This strategy aims to convert the Funding Rate Spreads generated by the perpetual contract market into protocol revenue, which is primarily distributed to stakers of its yield token sUSDe. In the past month, thanks to traders continuously minting and hedging USDe, the protocol's average daily fee revenue reached $3.1 million.

Asset Reserve Transparency: 94% Concentrated in CEX, Real-time Risk Management

According to the background on-chain and off-chain asset data, currently, 94% of the reserve assets supporting USDe are stored in centralized exchanges (CEX). Ethena utilizes its Automated Execution System to real-time balance collateral and adjust hedge positions on these platforms to manage market volatility risk. The remaining collateral is allocated in Liquid Staking Tokens (LSTs), aimed at capturing staking yields while maintaining an overall investment portfolio net risk exposure neutral.

Token Economic Model: 20% of revenue is used for ENA buyback and burn

Ethena Labs has established a proactive token burn mechanism. The protocol allocates 20% of total fees to repurchase its governance token ENA on the open market, subsequently burning these repurchased tokens. According to records from the on-chain tracker, this mechanism has cumulatively burned 58 million ENA tokens since February of this year, aiming to enhance token scarcity and value capture capability.

Facing Regulatory Challenges: SEC Explores the Positioning of USDe "Synthetic Dollar"

On July 1st, Zach Rosenberg, the General Counsel of Ethena Labs, along with the legal team from the external law firm Morrison Cohen, held a meeting with the U.S. Securities and Exchange Commission's (SEC) cryptocurrency asset working group. The main topic was to seek a clear definition of the regulatory attributes of "Synthetic Dollars" such as USDe.

According to the meeting memo released by the SEC, the Ethena team argues that USDe should be regarded as a Payment Instrument rather than a Security, for two reasons:

1. Holders do not rely on the issuer's efforts to profit: User profits come from market mechanisms (funding rates), rather than Ethena's operational performance.
2. Redemption rights anchored reserve assets: The redemption value is supported by the underlying reserve assets and is unrelated to the performance of Ethena's own balance sheet.

Ethena cited two pending bills in the U.S. Congress in its submission materials — the GENIUS Act and the STABLE Act — which aim to establish a federal licensing pathway for payment stablecoin issuers. However, Ethena pointed out to the SEC that the characteristics of USDe prevent it from being included in the existing definitional framework of these two bill drafts:

• Its price may fluctuate slightly around 1 USD (not strictly pegged).
• Its design does not include a legal promise of par redemption (No Legal Promise of Par Redemption)**. Therefore, USDe is currently in a **regulatory limbo.

Call for a clear framework, currently relying on offshore fund inflows

Ethena urged the SEC at the conference to consider "synthetic dollars" as an independent asset class for regulatory purposes. It also suggested that if Congress ultimately establishes a regulatory framework for payment stablecoins, the SEC should coordinate with banking regulators.

Currently, Ethena is still prohibited from distributing its products to US retail investors until it receives formal regulatory guidance. Therefore, the new influx of USD funds mainly comes from offshore funds and market maker desks, which manage their risk exposure by hedging on centralized exchanges.

Market volatility affects income, recent strong rebound

In May, due to the average perpetual contract funding rate spread compressing to below annualized 8%, the daily average income of the Ethena protocol experienced a slowdown. However, with the market's long-bias returning, pushing the basis back to double-digit annualized levels, its fee income rebounded strongly in early July, reaching a daily average of 3.8 million USD.

Latest Update: SEC is still reviewing feedback requests

According to the meeting minutes, the SEC's request for formal regulatory feedback on Ethena is still under review.