TechFlowPost published an analysis saying Ethena has already ended ENA incentives tied to USDe supply growth before its buyback engine has started. In the article’s framing, that is a direct test of whether the protocol can keep growing without continuing to hand out more ENA to users.
The piece argues that Ethena’s next phase rests on two pillars: yield and distribution. USDe supply is currently about $4.9 billion. ENA incentives linked to USDe growth ended in September, while the first buyback threshold will not be triggered until USDe supply reaches $7.5 billion.
Yield case centers on equity perpetual basis trades
According to the article, Ethena is expanding its basis-trading playbook from crypto into tokenized equities. The structure is described in simple terms: go long tokenized stocks and short the matching stock perpetuals, aiming to collect funding rates while hedging most of the directional exposure.
The analysis cites findings from Ethena’s risk committee. Approved stock perpetual listings on Binance were showing an average annualized funding rate of about 7% at the time of the research, while approved OKX listings were in an 8% to 16% range.
The article also stresses that these returns are not guaranteed. Funding rates can change and can turn negative, and the hedge still carries execution, basis, and counterparty risk. Even so, the expansion gives Ethena another market that may produce yield beyond BTC and ETH funding rates.
In the venues covered by the research, the stock perpetual market had about $2.9 billion in one-sided open interest at the time, which the article describes as a potentially meaningful expansion of yield opportunities for USDe.
Distribution case points to Ethena Pay
The second part of the thesis is distribution. The article says Ethena is betting that more people will hold USDe because it is useful, not because they are being paid token incentives. USDe has already been integrated across more than 100 venues and protocols.
From there, Ethena Pay is presented as an attempt to move USDe beyond crypto-native users and into everyday payments, savings, and spending. The article notes that Ethena is trying to reduce its dependence on third-party platforms for distribution and is building a direct-to-consumer channel through Ethena Pay.
Still, the piece does not treat product launch as proof of adoption. A payments product going live does not automatically mean meaningful USDe usage. If it works, though, it would give Ethena another source of demand that does not depend on continued ENA emissions.
Why supply and revenue matter more after incentives end
The article contrasts Ethena’s old growth model with the one it is now trying to build. The earlier model relied heavily on a cycle of ENA incentives driving USDe growth, followed by more incentives to keep demand in place. The new model is described as attractive yield plus broader distribution leading to organic USDe demand, then more USDe supply, then a larger potential revenue base, then the $7.5 billion supply threshold, and finally ENA buybacks funded by protocol revenue.
Under the framework cited in the article, buyback allocation starts at 5% of protocol revenue once USDe supply reaches $7.5 billion, with the percentage rising at higher milestones.
That is why the analysis says supply growth alone is not enough. The protocol also needs to generate sustainable revenue from that supply. For ENA holders, the article argues, USDe supply and protocol revenue may be the two indicators worth watching most closely right now.
Author 0xTindorr writes that Ethena is effectively running an experiment: can it continue to grow after stopping token emissions as its main incentive tool. With USDe supply at roughly $4.9 billion, there is still a sizable gap before the first buyback threshold. If supply keeps climbing after incentives have ended, the article says that would point more strongly to genuine demand than growth driven by continued ENA handouts. Whether that demand can ultimately translate into meaningful value capture for holders is the next question the author says he is watching.
