🥛 PRO | First app to hit $1B in revenue? 📈

GM! Welcome to Milk Road PRO. The ‘WiFi router’ of crypto newsletters.

(We’re signal baby!).

The U.S. elections are over, and the outcome? A green portfolio!

Trump is set to become the 47th president of the United States, and Republicans have taken control of both the House and the Senate. 

Translation? 

• More regulatory clarity for crypto 

• A crypto-friendly environment 

• And a clear signal for the markets to surge

With central banks easing up and more liquidity flooding the markets, this is the setup we’ve all been waiting for. 🥳

Everyone’s expecting prices to go up, sure—but what about the other effects? Think about more people entering crypto, more onchain activity, higher trading volumes, and increased leverage. 

Yes, all of that is coming. And today, we’re highlighting one application that stands to benefit massively from it all. 

A token that we believe will outperform Bitcoin and most other tokens this cycle. 

Why? Because funding rates—the cost of leverage (aka: loans)—are skyrocketing. 

And for Ethena, a stablecoin issuer that provides yield based on funding rates – these high rates are like rocket fuel.

Funding rates are trending up since the election and currently sit at 23.5%. This means Ethena will soon be able to offer over 30%+ yield to their $sUSDe holders—an incredibly attractive rate.

For comparison, $USDC and $USDT, the biggest stablecoins in crypto, currently provide a yield of – wait for it… 

0%! (How’s that for a competitive advantage??).

BTW: If you’re new to Ethena, we’ve got a detailed report explaining everything you need to know right here.

And just to put things in perspective…

The last project to offer a 20%+ yield on stablecoins was Terra Luna, and they managed to attract $20 billion in TVL!

And ok, yeah – Terra then famously collapsed to $0 (why’d you have to bring that up?). 

…but thankfully that’s something that won’t happen with Ethena (again, that’s something we explained in our previous report). 

The point we’re trying to make is: the interest in generating a high yield on stablecoins was proven by Terra. 

As for Ethena? It’s currently sitting at $3 billion in TVL with a sustainable strategy to generate substantial yield. 

And just look at that recent growth of $USDe!

Since mid-October, their stablecoin supply has grown by $0.6 billion. 

Something big is cooking within Ethena, and we’re going to dive into it to make sure that you know exactly what that is and how to capitalize on it!

Here’s what you’ll learn today:

• Why Ethena is stronger than ever

• What their new product and potential Ethena chain are all about

• The role of the token $ENA

• What we’re not so thrilled about with Ethena

• Our final thoughts and investment conclusions on $ENA

There’s a lot to unpack, so let’s jump right in!

ETHENA’S KPI

Let’s kick things off by looking at their main KPI: the supply of their stablecoin - $USDe.

Ethena has most of their key metrics available in real-time right on their website. It’s a fantastic feature—and honestly, we wish every project did this! So go ahead, check it out yourself whenever you like!

Anyway, here’s a chart showing the $USDe supply over time.

Currently, $USDe’s circulating supply stands at $3 billion. Ethena currently ranks as the 4th largest stablecoin, right behind $USDT, $USDC, and $DAI/$USDS. 

The closest competitor is $DAI/$USDS from Maker, with a supply of $5.6 billion. 

But if you’re a curious person (and we know you are), you might have questions around everything that happened back in late June when the circulating supply started dropping from $3.8 billion. 

Well, the answer is…not much, really. 

Summer kicked off, people went on vacation, spent more time offline, and onchain activity naturally slowed down. But nothing product-related triggered it.

It’s totally normal for products to experience some changes with seasonality. We wouldn’t be surprised if this trend continues, with a dip in demand next summer as well. 

The key takeaway? Looking at this chart, we’re impressed that Ethena managed to handle such rapid success and growth after launch. 

It became the fastest asset to reach $3B in supply in crypto—ever. And as it stands today, everything seems to be back on the right track, with demand picking up once again.

But there was one major twist over the summer that’s worth digging into…

STRESS TEST FOR ETHENA

Japan's Central bank unexpectedly raised interest rates, sending shockwaves through the markets and sparking a full-blown panic. 

The Nasdaq dropped 7% in one day! And remember, this was in stocks, not crypto—so yeah, this was serious.

For all the skeptics out there, this was their chance to jump in and call out Ethena’s design, predicting it would crack under pressure. 

…so, what happened? 

drumroll 

Absolutely nothing. Ethena didn’t even flinch. They didn’t have to make a single adjustment—everything ran smoothly, as designed. 👏 

Take a look at the chart showing supply and price peg stability. Ethena held steady through the chaos, proving the critics wrong and showing the strength of their system.

(Aka this isn’t a Terra Luna 2.0)

A major macro shock like that, and we barely see a blip in Ethena’s supply. 

And even more impressive? The price stability. 

Ethena’s stablecoin didn’t experience any wild swings; it’s held within 1% of $1.00 since launch. 

That’s exactly the kind of stability you want to see as an investor.

Why does that stability matter so much? 

Picture this: that market shock spirals into something bigger, rattling everything, and suddenly you need to pull some liquidity from crypto. 

Now imagine logging in, only to find that for every dollar you deposited into Ethena, you’re only getting back 98 cents—or worse. 

For a stablecoin, that’s no bueno.

In a crisis, the last thing you want is to see your stablecoin wobbling. 

You want peace of mind that your funds are rock-solid, ready to go whenever you need them. 

That’s why Ethena’s stability is such a big deal! 👏

But stability alone is not enough. It’s Ethena’s yield that is going to drive serious demand!

ETHENA SUPERIOR YIELD

Remember all the hype around Real World Assets (RWA) onchain? 

Well, it’s real—we actually have real-world assets on the blockchain now. 

But here’s the kicker: today, about 90% of it is just wrapped U.S. Treasuries. 

(Not exactly the revolution we were promised!).

U.S. Treasuries are easily accessible on the blockchain, meaning Ethena has to offer higher yields to stay competitive and attract more demand. 

So, let’s dive in and see how successful they’ve been at doing just that.

Right now, Ethena’s yield is about 25% higher in absolute terms. 

So while U.S. Treasuries might give you around 4% right now (of course this depends on the FEDs interest rates), Ethena is serving up a juicy 29%! 

The best bit? That gap is likely to stay that significant for some time. 

As we’ve shared many times before, interest rates in the US are heading lower, which means the yield from The US Treasuries is too. 

At the same time, when rates go lower, funding rates tend to go higher (as more people invest and use leverage during lower interest rate environments). 

This means Ethena's yield of 20% or more is likely to remain at these levels for at least the next few months. 

So while your neighbor grumbles about only getting 3% on his savings account, you can just smile to yourself. 

Or maybe it’ll be the perfect opportunity for you to introduce him to the world of crypto. 😊

There’s no better way to get people on board than with a solid financial incentive. And with offerings this good, it’s truly a unique opportunity.

Lemme summarize all of that for you: 

Ethena isn’t just positioned to offer an unparalleled yield—it has also been stress-tested by the market, which is a huge confidence boost for any skeptical users out there.

…but that’s not all. 

They’ve been busy over the past few months, and in the next few sections, we’ll dive into everything they’ve been building to determine if $ENA is a solid investment or not.

(You’re going to want to see this).