Ethena's Earnings Soar, But Negative Funding Rate Casts Shadow Over Rebound

Ethena (ENA) has shown impressive earnings and TVL growth in recent months. The synthetic dollar protocol generated $605,000 in protocol earnings during the first 17 days of May, marking an eight-month high. This is according to DefiLlama figures that track revenue minus user incentives.

Total value locked (TVL) has climbed by about $998 million since April 23, indicating fresh capital entering the protocol and growing demand for ENA's core products.

However, a negative funding rate threatens to derail ENA's projected 30% rebound. The perpetual market has seen netflow outflows of $819 million over the past ten days, with short positions stacking up. This is in contrast to spot exchanges, which have recorded cumulative netflow outflows of about $140 million.

The split between spot accumulation and derivatives selling pressure underscores the conflict driving ENA's near-term path. Charts place ENA on a slim support level, with room for a 30% rebound if buyers defend it. However, a break lower would expose a deeper demand zone before any structural recovery attempt.