Governance token of decentralized finance protocol Ethena (ENA) surged on Tuesday to its strongest since late January as the protocol has made a big step towards activate a fee switch that would share protocol revenues to token holders.

The token hit 87 cents in the early hours, advancing 8.3% over the past 24 hours, CoinDesk data shows. It’s up over 20% in a week.

The latest surge occurred as Binance, the largest crypto exchange by volume, said on early Tuesday it will introduce trading with USDe, Ethena’s $13 billion yield-generating token, on its platform starting Wednesday.

Listing the token on top exchanges is a key requirement for Ethena to enable the fee switch mechanism, sharing protocol profits with ENA token holders. The protocol made $54 million in revenues last month and over $480 million since its launch in late 2023, Token Terminal data shows.

«With the Binance USDE listing ENA fee switch is going to get turned on. That unlocks $500m of buybacks,» said Arthur Hayes, BitMEX co-founder and a prominent investor in Ethena.

Ethena catalysts

Besides the listing, there’s been a lot going for Ethena recently.

Ethena’s USDe token mushroomed to nearly $13 billion from $5.5 billion in-mid July as crypto investors chase yields. USDe, marketed as a «synthetic dollar,» uses bitcoin (BTC), ether (ETH) and Solana’s SOL (SOL) as backing assets, pairing them with an equal value of short perpetual futures positions.

The strategy generates revenue on its backing derivative assets when the perpetual funding rates are positive and passes on some of the income as yield to investors. USDe currently pays out 6.5% annualized yield for those who stake their tokens, higher than traditional money market funds and USDC, USDT lending rates on DeFi lender Aave.

Ethena is also taking part in the digital asset treasury fever that’s captivating stock markets. StablecoinX and TLGY, two firms about to merge and get listed on Nasdaq, raised $530 million to accumulate ENA tokens as a public vehicle.

The protocol also participate in the booming stablecoin issuance business. It’s launching the native stablecoin for Ethereum scaling network MegaETH and hinted at entering the competition to issue popular derivatives exchange Hyperliquid’s upcoming stablecoin.

Read more: Crypto for Advisors: The Mechanics of Generating Yield On-Chain