Ethena Labs has recently announced a significant boost in rewards for its users. As part of its “season 2” initiative, the platform is increasing rewards by 50% for some users.
This move has sparked a notable surge of 14% in the value of ENA, Ethena’s native token. Currently trading at $1.306, the token has grown remarkably since its debut last week at $0.64.
Ethena Labs Increases Users’ Rewards
The enhanced rewards come as a boon for users who choose to lock in their ENA for a minimum of seven days. Those who lock 50% or more of their ENA relative to their balance of USDe, Ethena’s yield-earning stablecoin, will be eligible for the 50% reward boost.
This initiative aims to incentivize user participation and strengthen the platform’s ecosystem.
Ethena has also introduced a strategy involving the purchase of Bitcoin (BTC) and simultaneous short selling to generate annual yield through cash and carry trade. This strategy has been in place for Ethereum (ETH) since January.
“After the unprecedented growth or USDe since launch, Ethena hedges represent ~20% of ETH open interest as of today. With $25 billion of BTC open interest readily available for Ethena to delta hedge, the capacity for USDe to scale has increased >2.5x,” developers at Ethena Labs said.
Read more: What Is Ethena Protocol and its USDe Synthetic Dollar?
The initial cap for the ENA lock has been set at $200 million and is subject to adjustment over time. However, team and investor allocations, locked on vesting schedules, will not be eligible for the ENA lock.
In related news, Frax Finance, another DeFi lending protocol, has passed a community governance proposal to allocate $250 million of Ethena Labs’ USDe to a new liquidity pool. This move is part of Frax’s roadmap and allows for creating an automated market operation (AMO) for minting new FRAX tokens backed by overcollateralized debt.
The proposal aims to create one of the deepest liquidity pools in the DeFi space and diversify Frax’s backing yield. According to Curve Finance data, the new Curve-based liquidity pool held $44.9 million of liquidity, with $30.6 million in FRAX coins and $14.6 million in USDe.
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