The Ethena Foundation announced a $360 million SPAC merger on Monday to create StablecoinX, a crypto treasury company.
The foundation will merge with TLGY Acquisition Corporation (TLGYF) to form a publicly traded entity focused on buying and holding ENA tokens.
Key Takeaways
$360 million deal: Ethena Foundation enters SPAC merger with $60M direct investment plus $300M from major crypto VCs
New public company: StablecoinX will trade on Nasdaq under ticker “USDE”
Single purpose: Company will use all earnings to buy ENA tokens
Major backers: Dragonfly, Ribbit Capital, Galaxy Digital, and other top crypto funds participating
Market position: Ethena is the third-largest digital dollar issuer after Tether and Circle
Deal Structure and Financial Details
SPAC Agreement Overview
The Ethena Foundation created a new validator and infrastructure business to merge with TLGY Acquisition. TLGY is a blank-check company that’s been looking for a tech or consumer-focused merger target.
The combined company will list on Nasdaq, giving Ethena access to public markets while keeping its protocol operations separate. This marks one of the first times a DeFi protocol has used a SPAC to create a dedicated treasury management vehicle.
$360 Million PIPE Investment Breakdown
The private investment in public equity (PIPE) funding breaks down as follows:
Direct Investment:
$60 million from Ethena Foundation
Institutional Investors ($300 million total):
StablecoinX: The New Entity
Corporate Structure and Mission
StablecoinX Inc. will trade on Nasdaq as “USDE” – matching Ethena’s synthetic dollar stablecoin name. The company has one goal: maximize ENA tokens per share through continuous accumulation.
The ticker symbol creates a direct connection between the public company and Ethena’s USDe stablecoin, reinforcing the relationship between StablecoinX and the protocol.
Business Operations
StablecoinX will operate in three areas:
Infrastructure: Running validators and technical infrastructure for Ethena
Staking services: Providing staking for ENA token holders
Token accumulation: Using all profits to buy more ENA
The company committed to putting every dollar of earnings into buying ENA tokens, creating ongoing buy pressure for shareholders.
Strategic Rationale and Market Context
Ethena’s Market Position
Ethena ranks as the third-largest issuer of digital dollars on-chain, behind only Tether and Circle. This puts the protocol in elite company among stablecoin news makers.
Unlike USDT or USDC, Ethena’s USDe uses a delta-hedging strategy instead of holding actual dollars. As explained in our complete review of Ethena’s staked USDe stablecoin, this synthetic approach generates yield for holders. Some investors call it an “internet bond” because of these yield characteristics.
Treasury Strategy Goals
The multi-year plan focuses on three objectives:
Build reserves: Accumulate a large ENA position to support protocol development
Create value: Generate returns for shareholders through strategic token accumulation
Support growth: Back the expanding demand for digital dollars globally
The company stated: “The proceeds from the PIPE are expected to anchor a multi-year treasury strategy to build a reserve of ENA, the Ethena protocol’s native token.”
Key Partnerships and Ecosystem Development
BlackRock Integration
Ethena partnered with Securitize in June to connect BlackRock’s BUIDL tokenized fund with Ethena’s USDtb stablecoin. USDtb is backed by BlackRock’s USD Institutional Digital Liquidity Fund, creating a bridge between traditional finance and crypto.
This partnership shows Ethena can work with major financial institutions while staying true to its crypto roots.
Institutional Support Network
The $300 million from crypto VCs brings more than just money:
Industry connections and expertise
Regulatory guidance
Partnership opportunities with portfolio companies
Long-term commitment to the space
Leadership Perspectives and Strategic Vision
Ethena Foundation Leadership Statement
Marc Piano, Ethena Foundation Director, explained the partnership’s importance: “The Ethena Foundation’s mandate is to safeguard Ethena’s longevity and decentralization. Partnering with StablecoinX under a disciplined, locked-token framework ensures that capital entering the ecosystem is long-term and value-accretive while enhancing ecosystem capital efficiency.”
The “locked-token framework” prevents the accumulated ENA from being dumped on the market, protecting token holders.
Future Outlook
StablecoinX arrives as the stablecoin market experiences rapid growth. As covered in our guide on the benefits of stablecoins, demand continues rising due to:
More institutions using stablecoins
DeFi applications expanding
Cross-border payments getting easier
Businesses seeking dollar exposure without banks
Market Performance and Price Analysis
ENA Token Performance
When the deal was announced, ENA traded at:
Current Price: $0.52
Day’s Change: +6%
All-Time High: $1.52 (December 2024)
The current price sits well below the all-time high, suggesting room for growth as StablecoinX begins operations.
Market Implications
This deal could affect crypto markets in several ways:
Treasury management model: Other protocols might copy this approach
Traditional investor access: SPACs provide a regulated path to DeFi exposure
Token demand: Committed buying should support ENA price
For those interested in stablecoin investing, our comprehensive guide for beginners explains the basics.
Conclusion
The Ethena Foundation’s SPAC deal creates a new model for crypto treasury management. By forming StablecoinX, Ethena gains access to $360 million in capital and public markets while maintaining its decentralized structure.
The deal matters for three reasons:
First of its kind: No major DeFi protocol has used a SPAC this way before
Clear strategy: StablecoinX has one job, and that is to buy and hold ENA tokens
Strong backing: Top crypto investors committed $300 million
For ENA holders, StablecoinX provides a mechanism for sustained token demand. For the crypto industry, it shows how DeFi protocols can tap traditional markets without compromising their values.
As digital dollars continue growing and Ethena expands with products like USDe and USDtb, StablecoinX will provide the resources needed for long-term success. Other protocols will likely watch this experiment closely, potentially copying the model if it works well.
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FAQs:
1. What is StablecoinX?
StablecoinX is a new public company created through the merger of Ethena Foundation’s infrastructure business and TLGY Acquisition Corp. It will trade on Nasdaq under ticker “USDE” and focus exclusively on accumulating ENA tokens.
2. How much money is involved in this deal?
The total deal involves $360 million in private investment commitments – $60 million from Ethena Foundation and $300 million from institutional investors like Dragonfly Capital and Galaxy Digital.
3. What will StablecoinX do with its revenue?
StablecoinX committed to using all earnings to purchase ENA tokens. The company won’t pay dividends or pursue other investments – every dollar goes toward ENA accumulation.
4. Why did Ethena choose a SPAC structure?
The SPAC structure allows Ethena to access public markets and institutional capital while keeping the protocol itself decentralized. It creates a regulated entity for treasury management without changing how the Ethena protocol operates.
5. How does this affect ENA token holders?
The continuous buying from StablecoinX should create steady demand for ENA tokens. Additionally, the locked-token framework prevents the accumulated tokens from being sold, reducing potential selling pressure.