Is It Time to Buy ENA? Ethena Pay, The Equity Basis Trade, and The Token Cleanup
Summary
- Ethena Pay is pitched as a non-custodial global neobank that makes crypto infrastructure disappear. Users can save, spend, and send money while avoiding seed phrases, gas, bridges, and stablecoin selection; Lito said the app operated in 50 countries, with 100 and then 150 targeted. The ambition is a product “my mom could use.”
- Ethena’s structural advantage is the vertical integration of USDe’s yield engine with the consumer app above it. Lito noted that net interest margin contributes 37% of Robinhood’s revenue and roughly 25% of Revolut’s, arguing Ethena can monetize balances while offering fiat rails and other features “for free or, in the worst case, at cost.”
- Equity-basis trading could become Ethena’s next differentiated yield source. Lito argued that stocks continue trading through bear markets, the stock market is “100 times bigger” than crypto, and equity perpetual activity might eventually surpass crypto perpetuals. Ethena’s claimed edge is execution: “No neobank, no other DeFi protocol, no one at all” has comparable multi-venue basis-trading experience at billion-dollar scale.
- The expanded USDe mandate reduces reliance on bullish crypto funding rates. Alongside the original delta-neutral crypto basis trade, Ethena described institutional BTC and ETH lending, limited DeFi lending, highly rated tokenized funds, Treasury bills, liquid reserves, and soon equity-basis allocations. Lito expected the new mix might lift USDe’s weekly rate and support its market capitalization.
- The ENA cleanup was presented as eliminating the visible token-supply overhang. A fund bought tokens from existing investors who had sold during their unlock, around the 7-cent low, while remaining investor vesting was accelerated so ENA would be fully unlocked on October 5, as described at recording. Even Lito said, “I was as surprised as you” when the announcement appeared.
- Ethena’s competitive case against Ether.fi and other neobanks rests on trust, UX, and execution rather than exclusivity. Lito said the category can expand without Ethena poaching existing users, cited Ethena’s record managing $15 billion without losing a cent, and reduced the durable moat to one line: “The only thing that can’t be copied is execution.”
- Distribution was already capacity-constrained, with more than 10,000 people waiting for access. At recording, Ethena Pay offered yield of up to 6%, zero-fee USD/EUR/GBP onboarding, nickname transfers, international bank payments, Apple Pay spending, and crypto cashback of up to 5%; a US launch was expected in three to four weeks. The product thesis is simply “save, spend, and send money.”
Deep dive
1. A construction detour brought Lito back to consumer crypto
Lito traced his nine-year crypto path from teaching newcomers through Crypto Testers in 2020—MetaMask, Aave, and Uniswap tutorials included—to working on the Hop and Socket bridges. Cross-chain infrastructure had once felt essential, but eventually became “a kind of commodity and solved problem.”
After losing motivation, having a child, and moving countries, he left Socket and spent four or five months helping his builder father-in-law build a house. It was “the hardest job of my life,” but taught him the value of physical work—and how “lucky,” in quotation marks, laptop workers are.
Ethena then approached him to help launch Ethena Pay, a consumer product aligned with his long-standing desire to onboard ordinary users. He called it “a match made in heaven,” abandoned plans for a longer break, went through roughly 10 interviews, and took responsibility for the go-to-market effort.
2. Ethena Pay hides the chain while preserving self-custody
Lito’s 60-second pitch was a mobile app for saving, spending, and sending money globally. The crucial distinction is non-custody: users alone control their wallets, allowing Ethena to expand faster than a bank or fintech that directly holds customer funds.
The intended experience hides most chain complexity, including seed phrases, gas, bridges, and choices among USDC, USDT, USDe, and PYUSD. Registration should feel like Venmo, even though the underlying product combines crypto balances with cards and fiat transfers.
Users can deposit stablecoins or other crypto and have them converted into a dollar balance earning up to 6% without manually entering a vault. USD, EUR, and GBP bank transfers were also supported with “literally zero, no foreign exchange fees, nothing,” according to Lito.
Nickname-based transfers carry no gas fees, while the card can be added to Apple Pay and pays crypto cashback of up to 5%. Cross-chain deposits are similarly abstracted: users select their source network, send to a generated address, and funds ultimately reach Ethena Pay on Avalanche.
3. Owning the dollar changes the neobank economics
Lito argued that competitors generally place a card or DeFi vault over somebody else’s stablecoin. Ethena instead owns the digital-dollar asset, its yield mechanism, and the consumer app—avoiding the profit-sharing arrangement of a white-label issuer.
That matters because balance monetization reportedly supplies 37% of Robinhood’s revenue and about 25% of Revolut’s. Ethena can therefore treat gateways, card currency markups, and adjacent services as acquisition tools while allocating the portfolio among basis trades, institutional lending, DeFi, tokenized funds, or Treasury bills. Lito also said a white-label competitor’s assets were only partly placed in Treasury bills.
DeFi Dad said he had been the one to change his mind about mobile crypto. Lito credited Argent’s Itamar for seeing the opportunity in 2019 but arriving before Ethereum fees and successive chain limitations were manageable; now strong mobile UX can “spread like wildfire” and scale to one or two million users, as he discussed in connection with FOMO.
Ether.fi remained the clearest competitor, particularly with crypto-backed borrowing that DeFi Dad’s accountants viewed as “some kind of alchemy or black magic.” Lito declined to attack rivals: the market can grow around everyone, and Ethena’s real defense is the trust it has built at scale, product UX, and execution.
4. Equity basis broadens USDe beyond the crypto cycle
DeFi Dad described Ethena’s original crypto basis trade as a roughly 50%-long spot and 50%-short perpetual structure that earns funding when the short positions receive payouts. Lito contrasted it with stock trading, which he said remains profitable even in bear markets as crypto activity contracts.
Lito said on-chain stocks and related real-world assets were unusual in continuing to grow through the bear market. He said the sector represented about 50% of crypto open interest and volume, and argued that equity perpetuals could eventually exceed crypto perpetuals because the underlying stock market is about 100 times larger.
Ethena had not yet allocated to equity trades at recording, but expected to begin “literally in a few days.” Other sources Lito listed included loans to institutional borrowers seeking long BTC and ETH positions, mainly through FalconX and other institutional lending units; limited DeFi lending; some lending through tokenized funds; AAA-rated instruments; Treasury bills; and liquid assets as a reserve buffer.
5. ENA’s cleanup trades future overhang for immediate clarity
Lito learned about the token changes alongside the public. A fund approached existing investors who had sold tokens during their unlock and offered to buy them back around the 7-cent low; many of those investors no longer held the tokens, while the fund held more of the supply.
Remaining investor unlocks were accelerated rather than stretched over another year, making October 5 the stated date for full unlocking. Lito’s interpretation was that the feared supply overhang would then be gone; the hosts, both ENA holders, viewed the package as almost exactly what long-term token owners wanted.
StablecoinX was explicitly described as separate from Ethena despite its confusing Nasdaq ticker, USDE. Its mandate was to accumulate ENA, not maintain a dollar peg. Lito said the apparent recent CEO change put a former Franklin Templeton head in that role, while Tae Chen remained involved at board or chairman level; “That’s literally all I know.”
Near-term capacity remained the constraint. More than 10,000 people were on the Ethena Pay waiting list, onboarding was proceeding week by week, and a US release was targeted within three to four weeks; Lito also expected equity-basis deployment to become visible in USDe’s weekly rate.