Ethena (ENA) Tokenomika

Ethena is a decentralized synthetic dollar protocol built on Ethereum, centered around its stablecoin, USDe. The protocol utilizes a delta-neutral hedging strategy involving staked Ethereum (stETH) and short perpetual positions on centralized exchanges to maintain a stable value and generate yield. The governance and utility token for this ecosystem is ENA.

Issuance Mechanism

The ENA token was deployed on April 2, 2024, as an ERC-20 token on the Ethereum blockchain. The protocol employs a dynamic issuance and burn mechanism to manage its supply.

• Total Supply: 15,000,000,000 ENA.
• Inflation Control: The protocol includes a "MAX_INFLATION" variable to restrict the number of new tokens that can be minted.
• Minting Restrictions: A "MINT_WAIT_PERIOD" variable ensures that the minting function can only be called once every 365 days. As of April 2024, the protocol can mint up to 10% of the total supply annually. Following the initial launch, no additional tokens can be minted until at least April 2, 2025.

Allocation Mechanism

The initial distribution of ENA was designed to balance the interests of core contributors, investors, and the broader ecosystem.

Usage and Incentive Mechanism

ENA serves primarily as a governance token, allowing holders to influence the protocol's operational and risk management frameworks.

Governance Utility

Tokenholders can vote on several key matters, including:

• Risk management frameworks and USDe collateral composition.
• Exposure limits for exchanges and custodians.
• DEX and cross-chain integrations.
• Community grants and the sizing of the Reserve Fund.
• The distribution of yield between sUSDe (staked USDe) holders and the Reserve Fund.

Incentive Campaigns

Ethena uses "Points" campaigns to bootstrap liquidity and adoption:

• Shard Campaign (Season 1): Concluded on April 1, 2024. It distributed 5% of the total ENA supply (750 million tokens) to participants based on their "Shards" earned through holding, locking, or providing liquidity for USDe.
• Sats Campaign (Season 2): Launched on April 2, 2024, replacing Shards with "Sats." This campaign incentivizes similar behaviors, such as locking USDe or providing liquidity on partner protocols like Pendle, Gearbox, and Mantle.
• Season 3: Launched on September 2, 2024, continuing the points-based incentive structure.

Staking and Rewards

• sENA: Users can lock ENA to receive sENA, a liquid receipt token. sENA accrues value from ecosystem rewards, such as unclaimed ENA from previous airdrops and potential future token supplies from partner protocols like Ethereal (15% commitment) and Derive (5% commitment).
• Restaking: In partnership with Symbiotic, staked ENA can be restaked to provide economic security for cross-chain USDe transfers via LayerZero.

Locking and Unlocking Mechanism

Ethena employs strict vesting schedules for its primary stakeholders to ensure long-term alignment.

Vesting for Team and Investors

Both Core Contributors and Investors are subject to the following schedule:

• Cliff: A 1-year cliff where no tokens are unlocked.
• Vesting: Following the cliff, tokens vest linearly on a monthly basis over 3 years.

Airdrop Vesting

For the initial Shard Campaign airdrop, the top 2,000 wallet addresses on the leaderboard were subject to a six-month linear vesting period for 50% of their claimed ENA.

USDe Unlocking

While USDe is a stablecoin, users who stake it (sUSDe) or lock it for boosts must undergo a seven-day cooldown period before they can withdraw their underlying USDe.

Upcoming Unlock Schedule

The protocol has a series of scheduled monthly unlocks for its native ENA token. Based on current projections, the following table outlines the upcoming unlock events: