Ethena just announced what everyone was waiting for. The protocol is ready to activate the fee switch. 9-figure gross annual revenue will be distributed to $ENA stakers. Here's a model projecting APR in bear, base, and bull cases. (Zoom into the image for all the calculations) 🧭 CONTEXT Ethena just wrapped up what, in my opinion, is the most triumphant period in the company's history. In case you missed it, here's a quick recap: 1. USDe listed on Binance I put together some projections a while back on how CEX integrations impact USDe's supply. Worth checking out: 2. Stablecoin-as-a-Service (SaaS) Product Launch This was launched through a collaboration with MegaETH, which will integrate "USDm" across its entire ecosystem. DeFi composability at its finest: 3. HyENA expansion @BasedOneX, directly backed by @ethena_labs, has quickly become one of the largest apps on Hyperliquid. Furthermore, Ethena’s team is now working on launching new products like perpetual swaps on equities and hUSDe native synthetic dollars. 4. Buybacks $ENA DAT (@stablecoin_x) has raised over $895m for token buybacks. The foundation announced the following plan: • $5m per day if $ENA >$0.70 • $10m per day if $ENA <$0.70, or if $ENA is down >5% in a 24h period Lastly, among the insane news of the past two weeks, one went somewhat unnoticed, but, in my opinion, it's a very interesting one. 5. Avalanche x Ethena Ethena deployed sUSDe on @avax, and @pendle_fi markets are already live for it. I recently wrote a piece on Avalanche's tech and pipeline of institutional entities joining its ecosystem: I think the chain has a significant margin of growth since it's heavily focused on enterprises and institutions through its sovereign L1 architecture. I'm curious to see how this partnership evolves now that these major entities can tap into Ethena's product line directly from their own sovereign L1s. Now, let's get to the juicy part: Ethena's fee switch. A few days ago, the Ethena Foundation confirmed that the fee switch parameters set by the Risk Committee have been met, and the ENA fee switch will be activated soon. For this reason, it's time to run some numbers on the impact this will have on $ENA stakers and the overall ecosystem. 📊 FEE SWITCH PROJECTIONS Revenue Let's start by looking at Ethena's revenue over the past 6 months: • August - $54.7m • July - $43.1m • June - $18.3m • May - $20.3m • April - $7.3m • March - $14.4m Impressive numbers. The trailing monthly averages look like this: • 3-month avg. - $38.7m • 6-month avg. - $26.3m Staked $ENA According to @EntropyAdvisors's Dune dashboard, 915 million ENA are staked, representing 6.1% of the total supply. This equals approximately $677M worth of tokens. How the Tables Work Table 1: Using Ethena's revenue from recent months and the current staked supply, we can calculate the APR that stakers would earn (formula shown in the image). Table 2: We then take those results and project different scenarios assuming the staked supply will increase as users seek yield from Ethena's revenue. For conservative, base, and bullish projections, the second table (right-hand table) uses the highlighted values from the first table (progressively higher fee-share paired with progressively higher revenue). Results As of September 17, Ethena is on track to generate similar or slightly lower revenue than the previous month. Given the favorable macro environment we’re heading toward, it's reasonable to expect the protocol to maintain these numbers over the coming months. This means the last three rows of the right-hand table aren't unrealistic (assuming the fee share is ~30-40%). Ultimately, $ENA stakers would earn between 10.3% and 26.6% APR, with a median value of approximately 15.8%. Note: This is all speculation and assumes yield is sent to sENA contract, so take this post with a grain of salt. However, it's undoubtedly a very bullish upgrade that will benefit all of us holders.