The native token of synthetic dollar protocol Ethena (ENA) climbed more than 10% after the Ethena Foundation unveiled a governance proposal that would direct the majority of protocol revenue toward token buybacks, alongside a completed buyout of locked tokens from certain early investors.
Fee switch and buyback proposal
The Ethena Foundation opened a vote on a fee-switch mechanism that would allocate 95% of net revenue paid to the foundation from Ethena’s core business lines to purchase ENA tokens. The buybacks would only begin once the circulating supply of USDe, Ethena’s synthetic dollar, reaches $7.5 billion, according to a Thursday blog post.
Also read: Abu Dhabi royal's group backs 49% stake in Trump-linked crypto bank venture: WSJ
Tokenholders have until Sept. 2 to cast their votes. Early indications show strong support: at press time, 65 votes representing about 14.4 million ENA in voting power had been recorded, all in favor of the proposal, according to Snapshot.
The ENA token rose 10.7% over the past 24 hours and gained 27% during the last week, trading above $0.17 as of 8:11 am UTC on Friday, according to CoinGecko data.
Also read: Strategy’s $66B Bitcoin Treasury Faces Capital Markets Risk, Not BTC Price: Report
Investor token buyout and unlock changes
In a separate move, the foundation said it had purchased locked ENA from certain major seed investors who had sold portions of their holdings over the past nine months. It also reached an agreement with lead investors to release the remaining unvested investor allocations on Oct. 5, replacing the previous monthly unlock schedule. Team tokens will continue to follow their original vesting timelines.
The change accelerates the remaining investor unlocks rather than canceling the tokens, which means the full supply will eventually enter circulation sooner than initially planned. This distinction matters for market participants monitoring potential sell pressure.
Why this matters
The proposal signals a shift in how Ethena intends to distribute value to tokenholders. By tying buybacks to protocol revenue, the foundation is creating a direct link between the protocol’s financial performance and its token’s market dynamics. If approved, the fee switch could reduce circulating supply over time, potentially supporting the token’s price, but the outcome depends on the pace of USDe supply growth and market conditions.
Ethena’s USDe stablecoin currently ranks as the sixth-largest stablecoin with a $4 billion market capitalization on DefiLlama. The protocol has attracted notable institutional interest; in September 2025, M2 Capital, the investment arm of UAE-based M2 Holdings, invested $20 million in ENA as a strategic holding. M2 Holdings previously invested in the Sui Foundation.
Conclusion
The Ethena Foundation’s dual announcement — a revenue-funded buyback proposal and a buyout of early investor tokens — has sparked renewed market interest in ENA. The governance vote remains open, and its outcome will determine whether the protocol adopts a more tokenholder-aligned revenue model. Investors should monitor the vote results and USDe supply milestones closely.
FAQs
Q1: What is the Ethena Foundation’s fee switch proposal?
The proposal would direct 95% of net revenue paid to the foundation from Ethena’s core business lines to purchase ENA tokens, but only after USDe’s circulating supply reaches $7.5 billion.
Q2: When will the governance vote close?
Tokenholders have until Sept. 2 to cast their votes. Early voting data shows unanimous support among participating addresses.
Q3: How did ENA token price react to the news?
ENA rose 10.7% in 24 hours and 27% over the past week, trading above $0.17 at the time of writing.
This article is for informational purposes only and does not constitute investment advice. Cryptocurrency markets are highly volatile; always conduct independent research before making investment decisions.
Be the first to comment