BTC Breaks Highs, Trump’s Win Boosts Crypto, and Fee Switch Proposals
Ryze Roundup - Second week of November.
Market Commentary
This week began with broad derisking ahead of the U.S. elections. Bitcoin briefly dipped below $67,000, with $540 million flowing out of Bitcoin ETFs, while altcoins experienced double-digit corrections. At 7 p.m. Eastern on Tuesday, as early political polls indicated potential winners in several states, Polymarket aggressively priced in a Trump victory. By 8:30 p.m., the New York Times projected Trump in the lead in Pennsylvania, swiftly driving bitcoin to new all-time highs.
Within 24 hours, it became apparent that a Republican sweep was the most likely outcome. This scenario is viewed as highly positive for DeFi protocols, which anticipate a more favorable regulatory framework under the new administration. A clearer regulatory stance could also encourage exchanges to list more protocol tokens. Notably, on Tuesday, Senator Lummis proudly tweeted that the U.S. government will "build a strategic Bitcoin Reserve," a plan that was laid out months ago, but could materialize under a Trump administration.
We believe this election outcome is exceptionally bullish for the crypto industry, marking the first instance of regulatory clarity for the sector. Such a stance could propel the industry forward, potentially setting the stage for other governments to adopt pro-crypto policies as well.
“Trump’s election is an extremely bullish industry catalyst and one that is not confined to the nation’s borders. Here at Ryze Labs we have already observed increased interest in exposure to digital assets among our international relationship circles as a direct result of this changing of the guard.” – Matthew Graham, managing partner.
Key News & Events
L1/L2 Update: Election-Day Lull and Post-Election Surge on Trump Momentum
In the days leading up to U.S. Election Day, onchain activity was notably subdued as investors de-risked and assessed election odds. However, with initial signs that Trump might take the lead, market participants began re-entering positions. Activity surged across networks: Polygon, Avalanche, and Base each recorded double their average daily fees, while Ethereum saw more than a threefold increase.
Market sentiment reflects expectations of a more crypto-friendly stance from a new administration. As a result, tokens like AAVE and LDO—previously facing regulatory pressures—rose by over 20%. We’ll be closely monitoring to see if this growth trajectory proves sustainable.
“Expect some confusion as even the most sophisticated and connected market participants try to parse if a Trump administration means a more balanced regulatory regime, a Wild West free-for-all, or if Trump will simply forget about crypto entirely. The most likely scenario is probably some combination of all three, with a lot of lurching back and forth.” – Matthew Graham, managing partner.
Meanwhile, networks such as Sui, TON, and Base continued to show growth in onchain trading volume and stablecoin supply, with Binance Smart Chain activity increasing since CZ’s release.
Wintermute Proposes Ethena Fee Switch
Wintermute has introduced a governance proposal to address the current lack of revenue sharing for sENA (staked ENA) holders within the Ethena Protocol. The proposal recommends activating a fee switch mechanism that would allocate a portion of Ethena’s revenue to sENA holders, aligning the protocol’s financial success with the interests of its governance token holders.
Currently, Ethena generates substantial revenue, driven primarily by the adoption of its stablecoin, or “synthetic dollar,” USDe. However, these earnings do not directly benefit sENA holders, revealing a structural disconnect. To bridge this gap, the proposal asks the Risk Committee to approve future revenue allocation for sENA, enabling token holders to participate in the protocol’s financial success.
The proposal also suggests that the Risk Committee establish specific performance milestones before any revenue is directed to sENA holders. Key benchmarks could include the circulating supply of USDe, revenue levels, and adoption rates on prominent distribution platforms. This milestone-based approach aims to ensure that revenue-sharing aligns with Ethena’s growth and maturity.
“As governance norms continue to mature, tokenholder Trump’s election activism will increase as well as expectations for transparency and fair dealing.” – Matthew Graham, managing partner.
In addition, Wintermute is calling for increased transparency from the Ethena Foundation regarding both historical and future revenue flows. The proposal seeks confirmation that past revenues have solely benefited the protocol and requests assurances that future allocations will be governed by ENA and sENA holders.
This proposal comes at a time of shifting regulatory dynamics in the U.S., which could become increasingly favorable to DeFi. As regulatory clarity emerges under a new administration, it may pave the way for more DeFi protocols to introduce similar revenue-sharing models, potentially creating new avenues for distributing protocol revenue across the DeFi sector.