Ethena’s ENA May Face Further Pressure Amid $5.7B Outflows and Revenue Drop

• Token unlocks worth $4.56 million added selling pressure on November 8.

• Daily earnings fell from $109,462 in Q3 to $8,987 in Q4.

• USD inflows plunged to negative $46 million, with transactions down to 24,500.

Discover why Ethena’s price is declining amid token unlocks and revenue drops. Stay informed on ENA’s market challenges and explore recovery strategies today.

What is causing the Ethena price decline?

Ethena price decline stems from a mix of token unlocks, plummeting protocol revenue, and substantial investor sell-offs. Between October 11 and November 12, net outflows hit $5.72 billion, shrinking Ethena’s total value locked to $8.581 billion. This has fueled bearish sentiment, with ENA dropping 10% as on-chain activity wanes.

How are token unlocks and revenue changes impacting ENA?

Token unlocks have intensified the Ethena price decline by flooding the market with new supply. On November 8, $4.56 million in tokens—0.2% of circulating supply—were released, coinciding with the ongoing S3 Airdrop distributing about $149,858 daily. These events coincide with broader market recovery struggles, amplifying selling pressure.

Protocol revenue has also cratered, signaling reduced user engagement. Data from DeFiLlama indicates daily revenue at just $1,817 and $11,849 over the past week, down sharply from earlier highs. This drop correlates with transaction volumes falling to 24,500, per Artemis, as fewer participants drive less on-chain activity and profitability.

Macroeconomic headwinds exacerbate these issues. Maria Carola, CEO of StealthEx, highlights how inflation signals and Federal Reserve policies are squeezing high-beta assets like ENA. She states, “Until inflation indicators and the Federal Reserve’s policy guidance offer clearer direction, high-beta assets like ENA are likely to remain under near-term pressure.” This expert view underscores the protocol’s vulnerability to external factors.

Source: DeFiLlama

Earnings trends paint a clearer picture of the strain. In the third quarter, average daily earnings stood at $109,462, but they have since tumbled to $8,987 in the fourth quarter. This 92% reduction reflects underwater profitability, prompting investors to pull back and further eroding confidence in Ethena’s synthetic dollar model.

Source: DeFiLlama

Frequently Asked Questions

What factors are behind the $5.72 billion outflows from Ethena?

Net outflows of $5.72 billion from October 11 to November 12 resulted from investor sales following token unlocks and declining earnings. This has directly lowered Ethena’s TVL to $8.581 billion, as holders move to safer assets amid bearish signals like reduced revenue and activity.

Why is Ethena’s revenue dropping so sharply in Q4?

Ethena’s revenue has fallen from $109,462 daily in Q3 to $8,987 in Q4 due to fewer transactions and user withdrawals. With on-chain activity at 24,500 transactions recently, lower engagement means less fee generation, compounded by macroeconomic pressures affecting DeFi protocols broadly.

Key Takeaways

• Investor Sell-Offs Dominate: Net outflows of $5.72 billion and negative $46 million USD inflows highlight heavy selling, weakening ENA’s position.
• Revenue Plunge Signals Trouble: Daily earnings dropped 92% to $8,987, tied to 24,500 transactions and reduced user activity per Artemis data.
• Token Unlocks Add Pressure: $4.56 million unlocked on November 8, plus daily airdrops, could push prices lower if market recovery stalls.

Source: DeFiLlama

Conclusion

The Ethena price decline reflects intertwined challenges like token unlocks, revenue shortfalls, and investor outflows totaling $5.72 billion, eroding TVL to $8.581 billion. As macroeconomic factors persist, per insights from StealthEx’s Maria Carola, ENA faces ongoing volatility. Monitoring Federal Reserve signals and protocol updates could signal recovery; investors should assess risks carefully in this dynamic DeFi landscape.