The Plunge of ENA Token and its Impact on the Ethena Ecosystem

In recent weeks, the native token of Ethena, ENA, has been experiencing significant selling pressure. This has caused the price of ENA to plummet to $0.73, marking its lowest price level since May 20th. The sudden drop in price has resulted in substantial losses for ENA stakers.

According to data from Lookonchain, the largest ENA staker recently decided to unstake their entire holding of 23.24 million ENA, valued at approximately $17.3 million. Following the unstaking, the whale proceeded to sell 19.36 ENA, equivalent to over $14.1 million, incurring a significant loss. This drastic move has left the investor with only 3.88 million ENA, valued at $2.74 million, signifying a loss of more than $13 million.

Despite the turmoil surrounding the ENA token, the Ethena ecosystem has been steadily expanding. Data from DefiLlama indicates that the total value locked (TVL) in the Ethena project has been increasing, reaching an impressive $3.44 billion as of June 12th. Additionally, the USDe stablecoin within the Ethena ecosystem has experienced remarkable growth since its launch. Within the first week, the supply of USDe reached $400 million, eventually surpassing $2 billion in just two months. However, concerns have arisen due to the rapid growth, particularly in light of the collapse of Terra’s UST stablecoin.

Failure to Rebound

Despite the growth of the Ethena ecosystem, the ENA token has failed to make a significant recovery. The token’s price continues to struggle, even as the ecosystem around it expands. The disconnect between the ecosystem’s growth and the token’s price performance has raised questions about the sustainability and resilience of the ENA token.

The recent plunge of the ENA token and the subsequent selling pressure have had a significant impact on the Ethena ecosystem. While the ecosystem itself has been flourishing, the struggles of the ENA token raise concerns about its long-term viability. Investors and stakeholders within the Ethena project will need to closely monitor the situation and assess the necessary measures to address the challenges facing the native token.