In July, Ethena experienced a big pump of 130%, leading the way, driven by high-yield engines of USDe stablecoin demand, is an ENA breakthrough of 1 USD on the horizon?

In July 2025, the crypto market experienced a strong risk appetite rally, with nearly $200 billion flowing into altcoins beyond Bitcoin and Ethereum. Among them, Ethena Labs' native token ENA performed particularly well, with a monthly increase of 130%, making it one of the strongest momentum assets in this cycle. A deeper analysis reveals that the sustained strength of ENA is closely linked to the rapid growth of its ecosystem stablecoin USDe. USDe attracted massive capital inflows with an annualized staking yield (APY) of up to 10% on sUSDe, raising $2 billion within the month and surpassing a total market capitalization of $7.3 billion, becoming the third-largest stablecoin. Meanwhile, the Ethena protocol generated over $30.85 million in monthly revenue and transformed profits into continuous ENA buybacks through a unique "funding rate arbitrage" model, creating a powerful value closed loop. In terms of institutional collaboration, Anchorage partnered with Ethena to launch the first stablecoin USDtb compliant with the "GENIUS Act." This article deeply analyzes how the high-yield engine of USDe drives ENA demand, explores the key support logic for ENA's price breakthrough of $1, and assesses its future potential in the DeFi stablecoin arena and the Ethereum Layer 2 ecosystem.

1. July sees a widespread rise in the crypto market, ENA becomes the strongest momentum star coin

In July 2025, the cryptocurrency market as a whole is showing a strong "risk-on" sentiment. According to data statistics, approximately 200 billion USD has flowed into the altcoin sector, excluding Bitcoin (BTC) and Ethereum (ETH), this month. In this wave of overall rise, the native token of Ethena Labs, ENA, has performed exceptionally well, surging by 130% in a single month, making it one of the most explosive momentum plays in the current market cycle.

II. ENA's strong performance is not a coincidence; USDe high-yield stablecoin is the core narrative However, looking at the bigger picture, the outstanding performance of ENA is by no means driven solely by short-term sentiment. According to AMBCrypto analysis, the native, yield-generating stablecoin USDe within its ecosystem is the main driving force behind this rise, and this core narrative cannot be overlooked.

3. USDe attracts capital rapidly, high APY drives the demand for DeFi stablecoins Ethena's USD-pegged stablecoin USDe has shown a strong ability to attract capital this month, with inflows reaching as high as $2 billion, driving its total market capitalization to $7.3 billion. This scale allows it to surpass many competitors, firmly sitting as the third largest stablecoin, behind USDT and USDC. This rise is by no means accidental; its core driving force lies in the highly competitive yield rates. Ethena offers up to 10% annual percentage yield (APY) for its staked version sUSDe, which is among the top in the entire Decentralized Finance (DeFi) space in terms of Risk-Adjusted Return. As shown in the figure below, the yield for sUSDe recently peaked at 10.29%, directly reflecting the strong income-generating ability of the Ethena chain. In short, the influx of funds into USDe is not only for value stability but also for pursuing high yields (Yield Farming).

4. Strong protocol revenue, staking demand boosts on-chain yields The solid protocol revenue supports this growth momentum. In the past 30 days, the Ethena protocol generated fee revenue of up to 30.85 million USD. This is mainly due to the surge in demand from users staking USDe to obtain high APY. Meanwhile, there has been significant progress on the institutional collaboration front: Anchorage Digital and Ethena Labs jointly announced the launch of USDtb. It is noteworthy that USDtb is the first stablecoin compliant with the requirements of the U.S. GENIUS Act. Overall, these factors highlight how Ethena effectively drives the scalable adoption of on-chain applications through the high-yield engine of USDe.

5. Key Mechanism: How does the rise of USDe convert into continuous buying of ENA? But the core question is: how does this growth loop translate into sustained demand for ENA Tokens? The answer lies in Ethena's unique value conversion mechanism. AMBCrypto points out that traditional stablecoins like USDT and USDC primarily earn returns by holding U.S. Treasuries and use part of their income to accumulate Bitcoin as part of their reserve strategy. Ethena, on the other hand, takes a completely different approach: it does not rely on Treasuries (T-bills), but cleverly leverages the volatility of the crypto market to generate on-chain returns by capturing Funding Premiums from perpetual contracts.

6. Yield Engine Analysis: Funding Rate Arbitrage Drives Value Cycle Its operating mechanism is as follows: when the market is in a bull market (Bullish), Bitcoin traders tend to go long on perpetual futures contracts. These long positions need to pay the funding rate (Funding Fee) to traders holding the opposite position (short, Short). Ethena strategically positions itself on the short side, collecting this portion of the funding fee as its source of income. The key is that this portion of generated income is subsequently used to repurchase ENA tokens in the open market. This design cleverly transforms the growth of USDe into real and sustained demand pressure for the native token ENA (Buy Pressure).

7. Massive buybacks in progress, strong support for ENA price In fact, between July 22 and 25, the Ethena Foundation repurchased 83 million ENA (approximately 1.3% of its circulating supply ) in the open market. This is part of its ongoing buyback program, totaling up to $260 million. It is this strong buyback mechanism that explains why the 130% surge of ENA is not just market noise. Given the current development trend, the ENA price breaking through the $1 level is not speculation, but a clearly visible trend direction on the technical chart (Chart).

Conclusion: Value Capturers in the New Paradigm of Stablecoin Yields Ethena's high-yield stablecoin model built on USDe has successfully attracted funds seeking DeFi stablecoin returns and cryptocurrency passive income. Its unique “funding rate arbitrage” revenue engine not only generates considerable protocol income but also directly transmits value capture to the ENA Token through a buyback mechanism, forming a powerful growth flywheel. With the dual support of institutional compliance layout (USDtb) and ongoing large-scale buybacks, ENA demonstrates the potential to surpass short-term market fluctuations. As it continues to expand in the high-yield stablecoin sector and the Ethereum Layer2 ecosystem, whether ENA can maintain strong momentum and effectively break through the psychological barrier of 1 USD has become the focus of many crypto investors and DeFi depth users. Its subsequent development will undoubtedly provide important case references for crypto market fundamental analysis and token economics design.