Let’s talk about @ethena ENA: 1) Most people probably feel wary about projects that told a perfect story last cycle but then fell from grace. Totally understandable. Many have experienced the crushing debuff of faith turning into losses. But if we set aside those emotions, ENA’s positioning as the ‘bull market engine’ might remain intact. In other words, as long as the market stays in a positive spiral, its metrics could soar. That’s the foundational thought behind why I’m keeping an eye on it. 2) What it does is create synthetic USD, USDe. The core mechanism is pretty simple: users deposit crypto assets, the protocol simultaneously opens an equal amount of perpetual short positions, creating a delta-neutral setup. Then, it distributes funding rates and staking yields to sUSDe stakers. Basically, it’s a systematic business of capturing perpetual funding rates, converting leveraged market money into stable returns. In a cycle dominated by short bull runs and long bear markets, this is a much-needed service. 3) Last cycle, thanks to this model, USDe’s holdings once surged to around $14.8 billion, solidly placing it in the top three stablecoins. The protocol also generated billions in revenue. Now, it’s fallen back to just over $4 billion, but the mechanism hasn’t changed. This means that as long as the market improves, funding rates return, and leverage demand picks up, the scale can expand again. 4) Plus, don’t forget that the most anticipated trend for the next cycle is asset tokenization and the Perps market. This essentially expands Ethena’s business pool beyond crypto. Tokenized stock market capitalization has already reached the $2 billion level, and monthly trading volume for stock perps has soared to hundreds of billions. The pool they can tap into has grown from crypto to the global stock market. The open interest ceiling is higher, and the funding rates are even juicier. This is potential growth—a new pie to chase. 5) Everyone knows that projects in this cycle rely heavily on institutions, and institutional demand is undoubtedly for safe hedging and stable returns. When these institutions enter the market, they’ll either push up the overall open interest in the perpetual market, supporting delta-neutral arbitrage, or directly use USDe to secure stable returns and layer on yield management. According to recent news, players like FalconX and Janus Henderson are already using it. Institutional demand is becoming more solidified. 6) As for ENA’s risks, they’re pretty obvious too: 1) It’s highly dependent on a bull market’s positive spiral. If the market fails to confirm a bull run, it’ll face significant short-term pressure. 2) While the infrastructure for stock tokenization is complete, the business of capturing funding rates from stock perps is still unstable. Liquidity pool depth and gaps in covering all trading segments mean this new market is tough to crack. 3) Arthur Hayes @CryptoHayes. Note: Last night in my group, I mentioned that ENA is a bad, ruthless, but also fierce token because it seems to never miss a single bull market. DYOR!