Wintermute Calls For Ethena To Share Revenue With Stakers

Ethena is the latest project facing pressure to activate a “fee switch.”

On Nov. 7, Wintermute, a crypto market-making firm, submitted a governance proposal calling on Ethena the distribute a share of its protocol revenue model with holders of staked Ethena (sENA).

“The Ethena protocol has and continues to generate substantial amounts of real revenue, indicating a clear level of [product-market fit] for USDe,” the proposal said. “Unfortunately, sENA does not directly benefit from this revenue, resulting in an explicit disconnect between sENA holders and the growth of the protocol.”

Ethena’s U.S. dollar-pegged stablecoin, USDe, boasts a market cap of $2.87 billion, while the protocol itself has generated approximately $128 million in fee revenue since January, according to Token Terminal.

sENA is a tokenized receipt representing staked ENA tokens. The asset can be used in DeFi to earn additional rewards, is freely tradable, and garners boosted points for holders. ENA stakers do not currently receive a share of protocol revenue.

The price of ENA is up 40% from $0.35 on Nov. 6 — one day before the proposal was submitted — to last change hands for $0.49, according to The Defiant’s crypto price feeds.

While the proposal calls for Ethena’s risk committee to greenlight the introduction of some form of revenue-sharing program, it does not make specific recommendations regarding what share of protocol revenue should be distributed to sENA holders.

The risk committee comprises five voting members representing prominent risk and advisory firms, including Gauntlet, Block Analitica, Steakhouse, Llama Risk, and Blockworks Advisory.

Wintermute urges the risk committee to develop a structured roadmap including clear milestones that Ethena must reach before the revenue-sharing model is implemented. These milestones could include targets for USDe’s circulating supply, protocol revenue, and USDe’s on major platforms such as centralized exchanges.

Wintermute also requested transparency from the Ethena Foundation regarding how protocol revenue has been allocated to date.

“We kindly request that the Foundation provide clarity on whether 100% of Ethena protocol revenue has been allocated or retained solely for the benefit of the protocol so far,” Wintermute wrote. “Additionally, we ask for confirmation that future revenues will continue to be managed within the Ethena protocol.”

This development follows Wintermute’s decision to accept USDe, a cryptocurrency-backed stablecoin, as collateral for spot crypto and derivatives trades on Oct. 25.

Revenue Sharing in DeFi

The topic of revenue sharing continues to dominate discussions across DeFi governance forums.

In February, the Uniswap Foundation proposed a governance upgrade to enable protocol fee collection, aiming to reward UNI token holders. Under this plan, fees would be distributed pro-rata to staked and delegated UNI holders, with governance retaining control over key fee parameters. While an initial version of the proposal was rejected, users have continued to call for its activation.

Meanwhile, other DeFi protocols are revisiting their revenue distribution frameworks. On July 25, Marc Zeller, founder of the Aave-Chan Initiative (ACI), introduced a proposal to Aave governance outlining a roadmap for distributing Aave’s protocol revenue to token holders.

On Nov. 5, Curve Finance proposed to allocate 10% of crvUSD-generated fees to token holders who stake their stablecoins. The vote, which began on Nov. 3, received overwhelming early support, with 99.73% of vote-escrowed CRV (veCRV) tokens. Voting will conclude on Nov. 9.

However, fee switches may be seen as a source of regulatory risk for proposals, as revenue-accruing assets may be vulnerable to being classified as securities on the basis that holders may have a reasonable expectation of profits from their investment.