Ethena has emerged as one of the top-performing cryptocurrencies today, recording a remarkable gain of 10.94% in the last 24 hours. As of 11:02 UTC, Ethena was trading at $0.7868, marking a significant uptick in its market performance. This rising bullish momentum follows a critical update from the Ethena team regarding the high Annual Percentage Yield (APY) on sUSDe.
New APY On sUSDe
The Ethena team recently shared details about the new APY on sUSDe, which now stands at an impressive 37.2%. This update comes after the team announced changes in how the protocol yield is distributed. Previously, the protocol retained a significant portion of the yield generated by assets backing staked USDe. Still, this portion has now been reduced to 20%, with the remainder allocated to the sUSDe contract. This redistribution has significantly boosted the APY, making sUSDe an attractive staking option for investors.
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To date the sUSDe contract has received protocol yield attributable to assets backing staked USDe, with the protocol retaining the remainder
As of today, the retained portion is reduced to 20%, with the remainder going to the sUSDe contract
As a result sUSDe APY = 37.2% pic.twitter.com/lAMiFeCHMt
— Ethena Labs (@ethena_labs) May 16, 2024
How The APY Works In Raising APY
Currently, only 15% of USDe is staked in sUSDe. If the entire protocol backing generates around 7% returns, transferring these returns from assets backing unstaked USDe to the staking contract effectively raises the APY of sUSDe. With the protocol retaining just 20%, the APY for sUSDe rises to approximately 37%.
How does this work?
Currently only 15% of USDe is staked in sUSDe
If entire protocol backing generates ~7%, transferring returns from assets backing unstaked USDe to the staking contract increases effective sUSDe APY – with 20% retained, sUSDe APY rises to ~37%
— Ethena Labs (@ethena_labs) May 16, 2024
Additionally, assuming the average protocol return since launch is 23%, the implied yield for sUSDe could increase to around 125%. This dramatic rise in yield is primarily a result of the low percentage of USDe being staked in sUSDe. However, as more investors stake their USDe, the potential increase in sUSDe’s APY will diminish.
Related: Ethena’s USDe Integration Into ByBit Pushes ENA Level
Governance Committee Established
To further enhance the governance and sustainability of this system, Ethena is set to establish its Governance Committee at the beginning of June. This committee will include some of the leading risk management advisory businesses in the crypto space, ensuring robust oversight and strategic decision-making.
As of the beginning of June the Ethena Governance Committee will be in place with several of the leading risk management advisory businesses in the space, and at that point governance will play a more involved role in deciding the ongoing retention of protocol returns
— Ethena Labs (@ethena_labs) May 16, 2024
The changes to the protocol yield distribution will remain in effect until at least the end of June, providing stability for current and prospective investors.
Ethena Launching On ByBit
Another significant development is Ethena’s upcoming launch on Bybit, a major cryptocurrency exchange. Starting next week, USDe can be used across the Bybit platform as collateral, offering users more flexibility and utility for their assets. This launch is expected to increase the adoption and liquidity of USDe, further solidifying Ethena’s position in the market.
The changes in place as of today will last until at least the end of June
This coincides with our launch on @Bybit_Official next week where USDe can be used across the platform as collateral https://t.co/5jlGdH66sQ
— Ethena Labs (@ethena_labs) May 16, 2024
New Integrations For Growth
Additionally, Ethena’s integrations with Gearbox Protocol and MorphoLabs will support users leveraging sUSDe. These integrations are designed to enhance the usability and functionality of sUSDe, making it a more versatile and attractive option for staking and yield generation.
Lastly, this will support users leveraging the @GearboxProtocol and @MorphoLabs integrations on sUSDe
Link to pools below:https://t.co/a7Y3NyKduAhttps://t.co/TxBijjiXlC
— Ethena Labs (@ethena_labs) May 16, 2024
Overall, Ethena’s recent performance and strategic updates highlight its potential for growth and innovation in the cryptocurrency market. The significant increase in APY for sUSDe, combined with upcoming governance enhancements and new platform integrations, positions Ethena as a promising player in the crypto space. Investors and market watchers will undoubtedly keep a close eye on Ethena’s developments in the coming weeks as it continues to evolve and expand its offerings.
Ethena Makes A Bullish Reversal, Indicating Rising Bullish Momentum
Source: TradingView
After over a month in the red, followed by a brief consolidation, Ethena has made a solid bullish breakout this week. Ethena has pushed through the $0.737 weekly resistance with high volumes, an indicator that bulls are firmly in control. If the Bulls sustain this momentum, Ethena will have little resistance and can quickly retest its April highs of $1.520 in the coming days.
However, if buying volumes drop, Ethena could enter a period of consolidation between $0.737, now support, and minor support at $0.810. If bulls fail and bears retake market control and breach the $0.737 support, the next critical level to watch would be the weekly support at $0.670. If the $0.670 support is broken, Ethena could quickly drop to a low of $0.50.
Ethena Easily Headed To $1 Soon
Going by the momentum ENA has built up in the past week, the odds are high that it could hit $1 during the weekend. Not only is this supported by ongoing developments within Ethena, but also the fact that the broader market is gaining bullish momentum. With Bitcoin now trading above $67k, altcoins like Ethena that have big news could be headed for parabolic price rallies.
Disclaimer: Cryptocurrency is a high-risk asset class. This article is provided for informational purposes and does not constitute investment advice. You could lose all of your capital.
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