Ethena's ENA Rises Over 20% on Investor Token Buyout and Proposed Revenue Buyback
Key Takeaways
- •ENA surged more than 20% to around $0.17 on Aug. 27 following the Ethena Foundation's four-part ecosystem update, which observers said would reduce selling pressure on the token.
- •The Foundation bought out locked tokens from certain major seed investors and released all original investor unlocks, raising ENA's circulating supply to 88% of its total token supply.
- •A framework agreement in principle will assign or license all Ethena Protocol intellectual property to the Ethena Foundation, meaning Ethena Labs investors receive no economic upside from the protocol.
- •A proposed fee switch would direct 95% of net revenue from Ethena-branded businesses toward programmatic ENA buybacks once USDe reaches its first supply milestone.
- •Community voting on the fee switch is live on Snapshot and is expected to close by September 2, with all 39 votes cast so far in support, while the proposal aims to restore USDe supply to its 2025 peak of roughly $15 billion from a current $529 million.
Ethena's native token ENA rallied more than 20% on Aug. 27, trading around $0.17, after the Ethena Foundation unveiled four changes covering early-investor tokens, future unlocks, protocol ownership, and revenue-funded ENA buybacks — updates that observers said would reduce selling pressure on the token.
The announcements also matter because they change how the protocol’s economics are presented to holders: more of the circulating supply is already unlocked, while a potential revenue allocation would tie future protocol activity more directly to ENA demand if approved. The Foundation said the changes are aimed at the ecosystem structure rather than a short-term market response.
The most significant change is a proposed fee switch that could direct 95% of net revenue from Ethena-branded businesses toward programmatic ENA purchases once USDe reaches its first supply milestone. The Foundation also moved to reduce uncertainty around recurring investor unlocks.
Investor Token Buyout Lifts Circulating Supply to 88%
Beyond a buyout of all locked tokens from certain major seed investors, the project has also released all of the original investors' unlocks. Seed investors are no longer subject to lock-ups or the monthly ENA unlocks.
The move effectively raised ENA's circulating supply to 88% of its total token supply. The remaining 12% of locked tokens are held by the team, the foundation, and the ecosystem. According to the announcement, team tokens remain subject to their lockup and vesting schedules. Notably, 20% of the circulating supply is held by digital asset treasury firm StablecoinX, which is also subject to a lockup schedule.
IP Framework Agreement Between the Foundation and Ethena Labs
Another component of the update is an agreement in principle between the Ethena Foundation and Ethena Labs concerning the project's intellectual property. The announcement states that a framework agreement is now in place under which all Ethena Protocol IP would be assigned or licensed to the Ethena Foundation.
This means investors in Ethena Labs do not receive any economic upside or other benefits from the project, and all value generated by the protocol will go to the foundation and the ecosystem.
Proposed Fee Switch Would Dedicate 95% of Net Revenue to ENA Buybacks
The update also includes a proposal to introduce a fee switch on Ethena. Under the proposal, 95% of net revenue from all of its business lines would be allocated to buying back the ENA token once a set milestone is reached.
The proposal aims to support the protocol's growth and restore USDe supply to its 2025 peak of roughly $15 billion. USDe's current circulating supply stands at $529 million, according to DefiLlama.
The fee switch requires a community vote before implementation. Voting is already live on Snapshot and is expected to close by September 2. So far, 100% of the 39 votes cast have been in support of the proposal.
Source: The Market Periodical
