Ethena (ENA): Undervalued? Network Activity Suggests Upside
Key Takeaways
Ethena's native token, ENA, may be fundamentally undervalued based on its network performance. Record Total Value Locked (TVL), robust daily trading volume, a low Network Value to Transactions (NVT) ratio, and the rapid adoption of USDe all point to strong underlying fundamentals.
While Ethena's price action might appear subdued, with ENA recently experiencing pullbacks after an initial surge, on-chain metrics paint a more optimistic picture.
Notably:
- Q3 Fees: Ethena has generated $117 million in fees so far in Q3, according to DeFiLlama.
- Growth: This represents a 150% increase compared to Q2.
Source: DeFiLlama
Revenue growth further supports this assessment. Ethena has already secured $42 million in revenue, surpassing Q4 2024's $27 million despite prevailing market conditions. This is a near 2,500% increase from Q2's $1.82 million, suggesting potential economic sustainability for ENA.
The growth of USDe, Ethena's stablecoin, further reinforces the positive outlook. USDe scaled to a $10 billion market cap in just 500 days, making it one of the fastest-growing stablecoins.
Network Activity Outpaces Price
Ethena's on-chain activity currently exceeds what is reflected in its price.
- Daily Trading Volume: Ethena recorded $633 million in daily trading volume, positioning it among the most actively traded DeFi assets.
- TVL: Its TVL reached a record $12.5 billion, with approximately $4 billion added this month alone.
With a market capitalization of $4.35 billion, ENA's NVT ratio stands at approximately 6.9. This relatively low figure suggests healthy network throughput in relation to its valuation.
Source: DeFiLlama
In conclusion, Ethena shows signs of being undervalued. High daily trading volume, record TVL, a low NVT ratio, significant revenue growth, and strong adoption of USDe all indicate robust network fundamentals, adoption, and user engagement. The $0.50 level could represent a buying opportunity, as on-chain activity and value capture outpace the price.