The Ethena Foundation has announced four major changes affecting the ownership, governance and token economics of the Ethena ecosystem, headlined by a buyout of locked ENA tokens held by certain seed investors who sold ENA during the past nine months.

Ethena is the protocol behind USDe, a synthetic dollar backed by delta-neutral positions that pair spot crypto collateral with short perpetual futures exposure, with yield generated mainly from funding payments on the short side. The ecosystem's ENA governance token entered circulation in April 2024, and portions of its supply were allocated to seed investors and the team under multi-year vesting arrangements.

The announcements, shared in an update highlighted by @WuBlockchain on X, also cover an agreement between the Ethena Foundation and Ethena Labs on protocol intellectual property and value ownership, a governance proposal to activate a fee switch funding ENA buybacks, and measures intended to address future monthly token unlocks for venture capital investors.

Ethena Foundation Completes Buyout of Locked Tokens

Under the first initiative, the Foundation said it had executed a buyout of all locked tokens held by certain major seed investors that sold any ENA during the last nine months. The announcement did not provide a specific figure for the number of tokens involved.

The move addresses locked allocations belonging to investors who had previously sold ENA while still holding tokens subject to vesting or lockup arrangements. The Foundation presented the transaction as part of a broader set of changes to the structure surrounding ENA ownership and the future distribution of value generated by the protocol.

Ethena Labs and Foundation Establish Master Framework Agreement

The second development is a Master Framework Agreement reached between the Ethena Foundation and Ethena Labs.

Under the agreement, intellectual property and ownership of the value accrued by the protocol are assigned exclusively to the Foundation, with governance of those assets to be carried out by token holders, according to the announcement.

The framework also specifies that no residual cash flow will be owed to equity investors in the Ethena Labs entity. The arrangement draws a distinction between the protocol and the corporate entity responsible for developing or supporting it, positioning the Foundation as the exclusive holder of protocol-related intellectual property and accrued value. Splits of this kind, in which a development company hands protocol assets to a foundation governed by token holders while corporate equity holders are left without claims on protocol cash flows, are an established structural pattern in the crypto industry.

Governance Proposal Targets ENA Fee Switch

A separate governance proposal has been introduced to implement a fee switch for the Ethena ecosystem. If implemented, net revenue generated across all business lines operating under the Ethena brand would be used programmatically to buy back ENA tokens. The proposal is now live and remains subject to the project's governance process.

A fee switch generally refers to a mechanism that directs revenue generated by a protocol toward token holders or token-related activities. In this case, the proposed structure would allocate the specified net revenue toward automated purchases of ENA. Fee switches have been among the most debated mechanisms in DeFi governance, with Uniswap's community weighing protocol fee proposals since 2023, while other protocols already route a share of platform revenue to token holders or automated buybacks. For Ethena, the underlying revenue base is tied to the mechanics of USDe, whose yield fluctuates with funding rates on the protocol's short perpetual futures positions.

The announcement did not state the outcome of the governance vote or provide a specific timeline for implementation.

Future VC Unlocks to Be Eliminated

The fourth change concerns the future supply of ENA associated with venture capital investors. The Ethena Foundation and lead investors have agreed to eliminate the future overhang associated with monthly VC investor unlocks by releasing unvested tokens, a measure the announcement described as a way of removing the future unlock structure tied to those investor allocations.

Unlock overhang has been a recurring consideration for venture-backed crypto projects, where scheduled monthly releases to early investors are widely tracked as a source of new circulating supply. ENA's total supply is fixed at 15 billion tokens.

Team tokens, however, will remain locked under their original vesting schedules. The announced changes therefore affect investor-related unlocks while leaving the previously established team vesting arrangements unchanged.

Taken together, the four initiatives represent changes to Ethena's token ownership structure, governance framework, protocol value rights and future token unlock arrangements. The proposed fee switch remains subject to governance, while the other measures announced by the Foundation relate to agreements and transactions involving the Foundation, Ethena Labs, seed investors and lead investors.

Source: Hokanews