In the world of cryptocurrencies, the functions and uses of tokens continue to evolve, and especially in the Ethena ecosystem, the application of the $ENA token is gradually expanding. With the upcoming launch of the Ethena chain, this will all change. This article will explore $ENA’s current use within the Ethena ecosystem, the upcoming generalized restaking feature, and potential rewards for restaking pools.
$ENA current usage
Currently, the main uses of $ENA in the Ethena ecosystem include:
Lock to enhance future rewards: Users can lock $ENA in Ethena to enhance potential future rewards. This measure is intended to encourage users who support Ethena’s growth in the longer term, thereby moving capital from short-term investors to long-term holders. The amount of USDe held by users will directly affect the amount of $ENA locked, meaning that as the USDe supply grows, the $ENA holding requirements for long-term supporters will also increase accordingly. Currently, there are approximately 290 million $ENA in the locked $ENA pool.
Pendle Finance’s PT-ENA Lock: Users can lock $ENA in Pendle Finance and receive a fixed annual yield (APY) of approximately 75%, returned in the form of PT-ENA. Additionally, holders of YT-ENA receive point allocations and only need to hold 1 YT = 1 ENA to meet the minimum $ENA holding requirement relative to their USDe holdings. Currently, there are approximately 160 million $ENA in the PT-ENA pool.
Upcoming generalized re-collateralization function: Ethena will further introduce a generalized re-collateralization pool, which will be an important step for $ENA to further integrate into the Ethena system. The primary purpose of this feature is to provide economic security for USDe cross-chain transfers that rely on LayerZero DVN’s messaging system. This is the first step in the upcoming multi-layer infrastructure for the Ethena chain and its chain-based financial applications, which will utilize the heavily collateralized $ENA module.
$ENA Heavy Staking Module Details
Ethena will first work with Symbiotic and LayerZero to pilot a generalized heavy-collateralization framework to secure cross-chain transfers of Ethena-based assets, including $USDe and $sUSDe. These transfers will be verified via the LayerZero DVN network and secured by $ENA locked in Symbiotic.
This mod will also include building a generalized framework to launch heavily collateralized DVNs for LayerZero ecosystem partners using aligned tokens to provide economic security and DVN operator choice. This design not only improves the security of assets, but also provides users with more participation opportunities.
Potential rewards for heavily pledged pools
The introduction of heavy-staking pools will bring more reward opportunities for $ENA holders. The $ENA locked by users in heavily collateralized pools will help increase the liquidity and stability of the entire ecosystem. These rewards may include, but are not limited to:
Additional token rewards: Users’ $ENA locked in the heavily collateralized pool will have the opportunity to receive additional token rewards, thereby increasing their return on investment.
Reduced Inflation Rate: To encourage users to lock up unlocked $ENA, Ethena will implement a locking requirement, which will immediately reduce the inflation rate of $ENA, further stabilizing the value of the token.
The future of the Ethena chain
The launch of the Ethena chain will bring new opportunities and challenges to the entire ecosystem. According to Ethena’s 2024 roadmap, the chain will support more financial applications and provide more utility to $ENA. User participation will not be limited to heavy staking, but will also cover cross-chain transfer, asset management and other aspects.
As the scope of $ENA expands, so will the growth potential of the Ethena ecosystem. Users will be able to participate in a variety of ways, whether it is locking, heavy staking or cross-chain transfer, these will become the main trends in the future.
in conclusion
The role of the $ENA token in the Ethena ecosystem is constantly evolving, and with the launch of generalized re-staking and the imminent arrival of the Ethena chain, there will be endless opportunities and challenges ahead. Users should pay close attention to these changes and take advantage of opportunities to get the best returns in this rapidly evolving ecosystem.