The Holy Grail: Internet Money

April 1st marks the end of the Ethena Shard Campaign, which ran for a duration of just 6 weeks in total - one of the industry’s shortest pre-token campaigns yet. USDe supply grew to over $1.3bn today.

This represents the fastest USD-denominated asset to reach >$1bn supply ever in crypto. Ethena’s USDe supply is now:

>1.5x larger than the entire tokenized treasury RWA market

>3x larger than the entire onchain ETH open interest for every DEX combined

Higher than all stablecoins on Base, Blast, zkSync, Aptos and Starknet…combined.

Ethena also became the highest earning protocol in the industry in just 3 weeks, setting a new benchmark for DeFi interest rates, while growing the Reserve Fund to over $25m in a month.

Key pillars of DeFi have already begun integrations with USDe including:

• MakerDAO Endgame roadmap

• Frax Singularity roadmap

• Curve Finance Llamalend

• Aave sUSDe Collateral

We are excited to announce that April 2nd 2024 will mark the beginning of the decentralization of the Ethena protocol, with the launch of Ethena’s native token, ENA.

This post will outline:

1. The process for claiming ENA on April 2nd

2. ENA tokenomics and vesting schedule

3. The plan for the next season of the Shard Campaign and the next ENA distribution

Summary:

1. The Shard Campaign will conclude on 1st April

2. Any user who unstakes, unlocks, or sells all of their USDe before this date will not be eligible for the airdrop

3. ENA can be claimed on April 2nd alongside the token listing on CEXs

4. The largest wallets will be subject to a 50% linear, pro-rata vesting over 6 months

5. Any unclaimed tokens or unvested tokens which are foregone by users exiting early will be re-allocated to loyal users who remain participating in Ethena

6. A second season of incentives will begin immediately on 2nd April

7. Users who participated in the first season who continue participating in the Ethena ecosystem will receive boosted loyalty rewards in the second season of incentives

Claiming ENA

Over the last 6 weeks, Ethena users have been accumulating “shards”, representing their contribution to the Ethena ecosystem.

Those shards will be used as a measure to distribute 750m ENA on April 2nd, or 5% of the total supply, in a linear fashion according to each user's accumulated shards.

Users can go to claim.ethena.fi to claim their ENA on April 2nd. This link is inaccessible now but will be live the day before claim.

NOTE this is the ONLY official Ethena claim link. If in doubt, please go through app.ethena.fi and proceed to the “Claim” tab directly and in the interest of caution, do not click on any links from third parties claiming to be associated with Ethena.

Claiming will be possible for up to 30 days after the launch of ENA, after which point any unclaimed ENA will be re-allocated to other users who continue to participate in the Ethena ecosystem by holding and using USDe in other applications during the second season of incentives. Further details will be provided on 2nd of April.

Unclaimed tokens will only be redistributed to the benefit of other users and will not be retained by the Ethena core contributors or the Foundation.

Distribution Conditions

As outlined in our previous post:

“Any users who fully exit any of the incentivized pools by selling out of the system prior to the end of the shard campaign will lose all of their shards. If you have repositioned between USDe, sUSDe, LP pools or Pendle you will still receive your shards.”

To be clear on this point: users who unstake USDe from the 7 day lock, unstake their LP from or remove their lock on Curve LPs, remove and sell (or otherwise dispose of, including via simple transfer) their USDe from any of the other incentivized deposits, or have their USDe balance fall below their USDe balance as of 26th of March, on a wallet-by-wallet basis, will not be eligible for the ENA distribution on the 2nd of April. Users will remain eligible for the ENA distribution if they are in the process of unlocking or unstaking prior to the 26th snapshot so long as they do not sell their USDe prior to the 2nd of April.

If you are currently staked, in the unstaking cooldown period, or holding USDe, and you take no further action, you will retain your full shard accrual and eligibility for the ENA distribution. Or in other words, if you do nothing you will be fully eligible.

Any disposition of USDe reflected in the snapshot following the release of this blog post will result in you losing all of your shards and you will not be eligible for the ENA distribution on the 2nd of April.

Holders from the following NFT collections at the snapshot on the 26th will receive 3% of the initial 5% airdrop, or 0.15% of the total supply:

i) SchizoPosters

ii) Redacted Remilio Babies

Two core contributors each hold a single NFT from one of these collections, and this will of course be excluded from the airdrop.

Remilio.

ENA Tokenomics and Vesting Schedule

In our first post outlining the Shard Campaign we made very clear:

“Note that the shard campaign is explicitly geared towards long term participants and users of the system.

Do not participate in the campaign if your intention is to farm and dump a quick airdrop. You will be disappointed. This is not a psyops.

We suggest you do not take part if your time horizon and attention span is the length of a month and if you have no desire to use and participate in the ecosystem over a longer duration.”

Per the outline above, and considering the 6 week length of the campaign, a vesting will be applied to the largest recipients of the airdrop in order to align long term incentives with the protocol.

In summary, the vesting is intended to reward longer term participation, and if a user chooses to exit the system early their unvested rewards are shared with other loyal users to increase the loyal users share of the airdrop who remain participating.

ENA Vesting

The top 2000 wallets by shard count out of 90,000+ users eligible for the ENA distribution, as well as holders of Pendle’s YT token, will be subject to a vesting schedule whereby 50% of ENA allocated is fully liquid as of April 2nd, while the remaining 50% is subject to a 6 month vesting period to promote long-term alignment.

Tokens will vest linearly and will be claimable at the end of each month following the initial airdrop, subject to the conditions below being met.

Smaller holders outside of the top 2000 wallets by shard count will have no vesting restrictions on their rewards.

The vesting parameters are outlined clearly in the final section, but in summary, vesting the locked allocation depends on the user’s continued participation in the Ethena ecosystem which will be measured by a users wallet balance of USDe not falling below the balance on 26th March snapshot date, as determined on a wallet-by-wallet basis. Users’ wallets will not be aggregated for this purpose.

So long as the USDe in the specific waller is greater than or equal to this amount, users will receive their full unvested amount.

To be clear: the vesting is pro-rata. If a user sells USDe after the initial 2nd of April airdrop, resulting in their balance being 10% lower than the snapshot, for example, the user will lose just 10% of their unvested ENA rather than the full amount.

Importantly, if a user does not continue participating in the Ethena ecosystem via the original wallet, their vesting token allocation will be pooled and re-allocated to all other users who continue to participate in the system.

Detailed worked through examples for the vesting conditions are available in the final section of this post.

If a user’s wallet has unstaked temporarily, and restakes to lock but never disposes of the USDe balance below the snapshot date, full ENA rewards will still be eligible for the user.

A section of the UI will be built for users to check their snapshot balance and current wallet balance to monitor their ongoing eligibility for the unvested amount.

Tokenomics

Ticker: ENA

Total Supply: 15 billion

Initial Circulating Supply: 1.425 billion

Distribution

Vesting Schedule

Core Contributors

This portion of the ENA allocation (30%) represents the distribution to the Ethena Labs team and advisors who have worked on the protocol to bring USDe to market. All core contributors are locked on a 1 year 25% cliff, with 3 year linear monthly vesting thereafter. No core contributor tokens are unlocked prior to the 1yr cliff.

Investors

The investor allocation represents token rights obtained by investors backing the Ethena protocol’s development, to bootstrap both the protocol and the Reserve Fund to support Ethena’s launch. All investors are locked on a 1 year 25% cliff, with 3 year linear monthly vesting thereafter. No investor tokens are unlocked prior to the 1yr cliff.

Foundation

The Foundation allocation will be used to further initiatives that serve to widen the reach of USDe, reducing crypto’s reliance on traditional banking rails and fiat-backed centralized stablecoins. This ENA will be used to fund further development, risk assessments, audits and much more.

Ecosystem Development and Airdrops

30% of ENA is allocated to developing the Ethena ecosystem. The first 5% represents the portion of ENA airdropped to Ethena users as part of the first season of the Shard Campaign. The remainder of the allocation will be used for various Ethena initiatives, including the upcoming second season of the incentive campaign, as well as various cross chain initiatives, exchange partnerships and much more, which will be held by a DAO controlled multisig.

ENA Utility

ENA will be used to vote on governance proposal on matters regarding the Ethena protocol, some of which will be key measures to the operations of the protocol, such as:

• General risk management frameworks

• USDe backing composition

• Exchange exposure

• Custodian exposure

• DEX integrations

• Cross chain integrations

• New product prioritization

• Community grants

• Sizing and composition of Reserve Fund

• Distribution allocation between sUSDe and Reserve Fund

Second Season of the Campaign

After the conclusion of our first campaign season of the Shard Campaign and the ENA token launch, we will immediately begin the second season of our campaign, the Sats Campaign:

The Sats Campaign will align with Ethena’s latest product development: onboarding BTC as a backing asset. We are incredibly excited to bring this product development to market as it will expand the capacity of USDe to grow beyond $10b in supply.

The Sats Campaign will run for another 5 months, until September 2nd 2024, or when USDe supply reaches $5bn, whichever comes first.

Sats Rewards

Initially, the structure of the new Sats Campaign will look very similar to the first season, with increased rewards to recognise the role that earliest users have played in Ethena’s success.

Any user who participated in the Shard Campaign will receive boosted rewards for participating in the Sats Campaign assuming their vesting conditions continue to be met.

Users locked in pools from the Shard Campaign don’t need to take any action to start earning boosted rewards in the Sats Campaign.

We will provide a follow up post next week with more details on the Sats Campaign.

FAQ

How do I claim my ENA?

Users can go to claim.ethena.fi to claim their ENA on April 2nd. This link is inaccessible now but will be live the day before claim.

NOTE this is the ONLY official Ethena claim link. If in doubt, please go through app.ethena.fi and proceed to the “Claim” tab directly and in the interest of caution, do not click on any links from third parties claiming to be associated with Ethena.****

Users have 30 days to claim before unclaimed ENA will be reallocated to other users.

How do I know if my shards are vesting or not?

A new section in the UI will be provided the day before claiming for each user to measure and monitor their unvested ENA conditions.

Why do smaller wallets receive no vesting conditions?

For users with a smaller wallet balance we wanted to acknowledge the higher gas fees required to participate in Ethena and minimize friction for these users.

If I unstaked/unlocked before the 26th of March snapshot, will I still be eligible?

Yes so long as your USDe balance does not fall below the 26th of March snapshot and you do not dispose of the USDe, you will be eligible.

Do I continue earning rewards after the 2nd of April?

Yes users will continue to automatically earn the new Sats Campaign rewards if they have already participated in Ethena. So long as a user does not dispose of USDe and continues to participate, they will receive a boost to the second season rewards. Further details will be provided next week.

Is all my ENA subject to vesting, or just the portion earned from Pendle YT?

If you are in the top 2000 wallets measured by shards earned, 50% of your ENA will be subject to vesting requirements, with the other 50% liquid on launch day.

All ENA earned from Pendle YT positions will be subject to vesting in the same manner: 50% subject to vesting and 50% liquid on launch day.

Worked ENA Vesting Examples:

If a user’s allocation is subject to vesting, the following framework applies to receive the vested portion at the end of the period, depending on the positions taken up by the user:

• YT Pendle: no restrictions

• PT Pendle: no restrictions

• LP in Curve: do not unstake or remove LP from lock within the Ethena app

• Lock USDe: do not unstake or remove from lock within the Ethena app

• Holding USDe: do not dispose of USDe from the eligible wallet below the USDe balance on snapshot date

• Deposit USDe on Morpho/ Gearbox/ Other: do not dispose of USDe from the eligible wallet below the USDe balance on snapshot date

• sUSDe: do not dispose of USDe below the balance on snapshot date

Pendle:

• There are no restrictions related to shards earned from Pendle USDe and sUSDe pools as implementing restrictions on these pools was not possible. YT holders will receive their shards and airdrop with the vesting outlined above. PT holders will not be allocated ENA since it is allocated  to YT holders.

Curve:

• Users must keep their Curve LP positions locked to remain eligible for their unvested ENA related to Curve.

• Even users that unlock and remain in the Ethena ecosystem will lose their allocation of unvested ENA

• Users must remain in their original Curve LP position locked on Ethena.

• Users that unlock their Curve LP positions before the vesting period is over will lose their unvested ENA which was earned from their Curve position.

USDe Locked:

• Users can unlock their USDe and still be eligible for unvested ENA as long as they stay within the Ethena ecosystem and either hold USDe or enter into another USDe pool. So long as their wallet balance of USDe does not fall below the balance on the snapshot date users will not lose allocated ENA.

• Unlocking USDe and disposing of it by swapping into another asset or sending to a different wallet will result in a loss of unvested ENA that was earned from the locked USDe position.

sUSDe Staked:

• Users can unstake their sUSDe and still be eligible for unvested ENA as long as they stay within the Ethena ecosystem and either hold USDe or enter into another USDe pool. So long as their wallet balance of USDe does not fall below the balance on the snapshot date users will maintain their ENA allocation.

• Unstaking sUSDe and disposing of it by swapping into another asset or sending to a different wallet will result in a loss of vested ENA that was earned from the sUSDe position.

USDe held and not locked in Ethena:

• Swapping into another asset or sending to a different wallet will result in a loss of unvested ENA that was earned from holding USDe during the Shard Campaign.

• Entering into a new USDe pool will maintain a user’s eligibility for unvested ENA, as will continuing to hold their USDe.

Pro-Rata Vesting

• A user's wallet will be monitored with a basic onchain check to calculate whether the USDe balance has fallen below the balance on the 26th of March snapshot date. So long as the USDe is greater than or equal to this amount, users will receive their full unvested amount.

• If a user sells or otherwise disposes of USDe (including simple sends to a different wallet), resulting in their initial wallet balance being 10% lower than the snapshot, for example, the user will lose just 10% of their unvested ENA rather than the full amount.