Ethena Foundation Proposes Revenue-Funded Token Buybacks, Accelerates Investor Unlocks, Fueling ENA’s Double-Digit Gains

The native token of the synthetic dollar protocol Ethena, ENA, has experienced significant gains, surging by double digits following the Ethena Foundation’s announcement of four key ecosystem changes. Among these pivotal updates are a proposal for revenue-funded token buybacks and the successful completion of buyouts for locked tokens held by select early investors. These strategic moves aim to bolster the Ethena ecosystem and enhance the value proposition for its native token.

At the heart of the proposed changes is a fee-switch mechanism that has been put forth for a vote by Ethena tokenholders. Under this proposal, a substantial 95% of the net revenue generated by Ethena’s core business operations would be directed towards purchasing ENA from the open market. This buyback initiative is slated to commence once the circulating supply of Ethena’s synthetic dollar, USDe, reaches a predetermined milestone of $7.5 billion. The Ethena Foundation detailed these plans in a blog post published on Thursday, outlining the operational and financial implications of the proposed fee-switch.

The voting period for tokenholders is set to conclude on September 2nd. As of the latest available data from Snapshot, a decentralized governance platform, the proposal has garnered considerable support. 65 votes, representing approximately 14.4 million ENA in voting power, have been cast, with all of them unequivocally in favor of the fee-switch proposal. This strong initial consensus suggests a high level of confidence among tokenholders regarding the potential benefits of this revenue-sharing and buyback mechanism.

The positive market reaction to these announcements has been evident in the performance of the ENA token. According to data from CoinGecko, ENA registered a notable increase of 10.7% over the preceding 24-hour period. Looking at a broader timeframe, the token has seen a substantial 27% surge over the past week. As of 8:11 am UTC on Friday, ENA was trading above the $0.17 mark, reflecting investor optimism driven by the proposed ecosystem enhancements.

In addition to the fee-switch proposal, the Ethena Foundation has also addressed the issue of locked tokens held by early investors. The foundation disclosed that it has completed buybacks of locked ENA from certain major seed investors who had divested some of their holdings over the past nine months. This proactive measure aims to manage the supply of ENA and potentially reduce selling pressure from early backers.

Furthermore, in a separate but related development, the foundation has reached an agreement with its lead investors regarding the release of remaining unvested investor allocations. Instead of the existing monthly unlock schedule, these allocations will now be released in a lump sum on October 5th. This accelerated unlock schedule, while potentially increasing the circulating supply in the short term, is a strategic move to streamline investor vesting and provide greater clarity on future token distribution. Importantly, team tokens will continue to adhere to their original vesting schedules, ensuring continued commitment from the core development team.

It is crucial to note that this change accelerates the release of remaining investor allocations rather than canceling the tokens themselves. This distinction is important for understanding the total supply dynamics and the potential impact on the market.

Ethena’s synthetic dollar, USDe, has emerged as a significant player in the stablecoin landscape. Currently, USDe ranks as the sixth-largest stablecoin by market capitalization, boasting a valuation of $4 billion, according to data from DefiLlama. This substantial market presence underscores the growing adoption and utility of Ethena’s synthetic dollar product.

The Ethena protocol has also attracted significant strategic investment. In September 2025, M2 Capital, the investment arm of UAE-based M2 Holdings, injected $20 million into ENA. This investment positioned ENA as a key strategic holding for M2 Capital, which has a history of investing in promising blockchain projects, including a previous investment in the Sui Foundation. Such strategic backing from established financial entities can further bolster confidence in Ethena’s long-term prospects.

The broader context of the stablecoin market is also relevant. Recent analyses suggest that Ethereum risks losing its second-place position in the cryptocurrency market capitalization rankings, as stablecoins continue to gain significant ground. This trend highlights the increasing importance and influence of stablecoin protocols within the decentralized finance (DeFi) ecosystem. Ethena’s USDe, with its growing market share, is well-positioned to capitalize on this evolving landscape.

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