Halting incentives, granting waivers to whale holders: Ethena’s layered strategic play.
Written by Ma He, Foresight News
On September 25, Ethena took to X (formerly Twitter) to announce it has integrated USDe’s basis trading strategy with Binance’s tokenized US equities and equity perpetual contracts. The following day, the protocol issued another notice stating that all token incentives and inflation tied to USDe growth will be fully phased out starting at the end of this month.
Since September 16, ENA’s price has rocketed from roughly $0.014 to near $0.20. After a brief consolidation around the $0.20 level, the token climbed further to near $0.28, notching a nearly 100% gain over a 10-day period.
Behind ENA’s price rally, is the move driven by positive news catalysts, upgraded market expectations, or pre-positioning ahead of the massive token unlock set for early October?
Hedged Returns Expanded to Tokenized Equities, Growth Incentives Cut Off
On September 25, Ethena integrated Binance’s bStocks tokenized US equities as spot collateral assets for USDe, hedging corresponding exposure via Binance equity perpetual contracts. The Ethena Risk Committee had previously approved the inclusion of tokenized equity basis trading into USDe’s allocation strategy. Historically, Ethena has generated returns for USDe by holding spot crypto assets and hedging positions with derivatives, building a delta-neutral yield product.
According to official website data, USDe’s current total supply is approximately $5.5 billion. Ethena noted that Binance’s equity perpetual contracts have an open interest of over $2.9 billion, with a 105% month-over-month compound growth rate year-to-date. The average annualized return from equity basis trading over the past six months stands at 3.56%.
Ethena founder Guy Young claimed this is the most critical expansion to USDe’s underlying capital sourcing mechanism since the protocol’s launch. Ethena projects that as more traditional finance assets are tokenized and brought on-chain, the equity perpetual contract market may eventually present far larger opportunities than the crypto perpetual contract market.
USDe is not a traditional stablecoin backed by cash and short-term Treasuries. Instead, it packages a delta-neutral strategy into a dollar-pegged product: holding spot assets while shorting an equivalent notional value of perpetual contracts, to capture the funding rates paid by long positions to maintain leverage. Price swings are fully hedged across both legs of the trade, with returns derived entirely from the funding rate spread itself.
From 2024 to 2025, this yield engine operated at high efficiency. The volume-weighted Bitcoin funding rate averaged around 11% annualized across 2024. USDe’s supply peaked at roughly $14.8 billion around October 2025. By August 2026, the contribution of crypto basis trading to USDe’s returns had compressed to roughly 1%, and the token’s supply shrank to below $5 billion.
The funding rate spread from crypto market derivatives alone is no longer sufficient to support Ethena’s growth narrative, prompting the team to port the same structural framework to the rapidly growing tokenized equity sector.
In parallel, USDe’s growth incentive program has been officially terminated.
In an official announcement this month, Ethena stated that token incentives tied to USDe growth have dropped by roughly 85% since the protocol’s first airdrop in 2024. By the end of this month, all USDe-linked token incentives and inflation will be fully halted, with no further distributions moving forward.
Data from Crypto Briefing shows the protocol has distributed over $750 million in rewards since launch, helping push USDe’s supply to roughly $15 billion in October 2025. Supply has since contracted by more than 65%. The downward trajectory of incentive payouts has closely tracked the cooling of crypto market funding rates. The full elimination of incentives by month-end is less of an abrupt cut from full levels, and more of a final tightening of a valve that was already mostly closed.
If the expansion of hedged return sources addressed the challenge of scaling yields, this latest update solves the core problem of "avoiding ENA dilution to support USDe growth". Moving forward, expanding USDe supply will no longer require minting additional ENA to cover holding costs. Since incentives have already dropped by 85%, the reduction in selling pressure from incremental changes is limited; the move is primarily focused on reframing ENA’s tokenomics from a subsidy-driven growth model to a "verifiable supply" framework.
Major Token Unlock Scheduled for October 5
In August this year, the Ethena Foundation announced that the full remaining unlock of early investor allocations will be completed ahead of schedule starting October 5, 2026, with no investor-held tokens remaining in locked status after that date. Team-held tokens will still follow the original lock-up and vesting schedule. The Foundation stated this adjustment is intended to remove the persistent overhang of monthly VC-driven token unlocks.
The original vesting structure was linear monthly releases. After the cliff unlock period ended in April 2025, investor allocations were released at a rate of roughly 78.125 million ENA per month on the 5th of each month, originally scheduled to continue through March 2028. Core contributor allocations released 93.75 million ENA per month on the same date, while Foundation allocations released 40.625 million ENA per month on the 2nd of each month. Following the August reform, the investor vesting line was eliminated: the remaining 17 months of investor allocations, originally scheduled to be released from November 2026 through March 2028, were consolidated into a single release on October 5. Investor vesting will now wrap up roughly 17 months ahead of the original timeline.
The monthly vesting schedules for team and Foundation allocations are not included in this acceleration, with regular team allocations still releasing as originally planned on October 5.
Parallel to the accelerated unlock, the Foundation executed a buyback of sold holdings from seed round investors. According to the Foundation, it purchased locked tokens via over-the-counter (OTC) transactions from select major seed round investors who held initial allocations exceeding 0.25% of total supply and had sold ENA after the October 10, 2025 market peak. The Foundation made at-par repurchase offers to investors who had not sold after the peak, but none accepted. One wallet among the selling group also declined the buyback offer. The Foundation did not disclose the identity of the buyback counterparties, the number of tokens purchased, or the transaction consideration.
In addition, StablecoinX, one of the largest ENA holders, holds approximately 3.03 billion ENA — around 20% of total supply — which was originally subject to a 48-month lock-up period under a Private Investment in Public Equity (PIPE) transaction. On September 14, StablecoinX signed a waiver letter with Ethena OpCo and the Ethena Foundation, later disclosed via a Form 8-K filing. The filing states that starting October 5, all lock-up, vesting, and staged unlock restrictions on ENA held by or to be delivered to StablecoinX will be permanently lifted, aligned with the release date announced by the Foundation for other holders. The removal of restrictions does not allow for free selling. The document clarifies that the relevant tokens will be held as inventory, with any sale, transfer, or disposition requiring prior written approval from the Foundation. If a sale is required for working capital or strategic needs, the Foundation must be notified in writing at least five business days in advance, and holds a right of first refusal to purchase the tokens at the proposed sale price.
In response, some community members noted that ENA’s secondary market liquidity is highly concentrated and controlled. The project team ostensibly eliminated lock-up periods, but in practice formed a price coalition to control market pricing power after October.
With only one week left until the major unlock, the day of the token release may be the moment the market casts its verdict with actual capital flows.