The Ethena ecosystem is entering a phase of radical restructuring. The Ethena Foundation has put forward for voting a proposal that fundamentally changes the protocol's economics: almost all net revenue will be directed toward a programmatic buyback of the governance token ENA. This is not just a course correction, but a full-fledged paradigm shift in how value is distributed within the project.
All revenue goes to buybacks
The essence of the initiative is a "fee switch." Instead of the usual distribution of income across ecosystem directions, all funds from Ethena products will be converted into market purchases of ENA. In the previous model, for example, profit from the USDe stablecoin went to rewards for sUSDe holders and partner programs. Now this flow is being redirected to support the token.
The risk committee has already approved the initiative, and voting has been launched on the Snapshot platform. However, Ethena has not disclosed exact timelines and does not guarantee that the community will accept the new model.
The Foundation takes control over value
In parallel, Ethena Labs and the Ethena Foundation have signed a Master Framework Agreement. According to the document, the protocol's intellectual property and rights to the value it generates pass exclusively to the foundation. These assets will be managed by ENA holders through governance mechanisms. Under the terms of the agreement, Ethena Labs investors lose residual rights to cash flows—an unprecedented step for the DeFi sector.
Investors give up future unlocks
A key element of the update is tokenomics. The Foundation has reached an agreement with major venture investors to cancel monthly unlocks of their tokens. This concerns 25% of the fixed ENA supply—3.75 billion coins. Previously, the scheme provided for a one-year cliff and a three-year vesting period. Now, the unlocked assets of investors who agreed to the new terms are removed from the schedule. Team tokens will continue to enter circulation according to the original schedule.
Additionally, the foundation announced the buyback of remaining locked ENA from a number of large seed investors who had been selling assets over the past nine months. Details of the deal have not been disclosed.
Market reaction
The market responded positively to the news: over the course of a day, the ENA price rose nearly 12%, reaching $0.16. For comparison, in April 2024, the asset traded at a peak of $1.5. The market capitalization stands at $1.54 billion, and the total value locked on Ethena is $4.5 billion, of which ~$4 billion is attributed to USDe.
Recall that in August 2025, USDe entered the top three largest stablecoins, but within three months its supply collapsed by more than 50% due to falling yields.
My analysis: Ethena's initiative is an attempt to kill two birds with one stone: create sustainable demand for ENA through buybacks and simultaneously eliminate the main source of price pressure—future unlocks. However, success will depend on whether the protocol can generate sufficient revenue amid declining USDe yields. If not, the "fee switch" may prove to be only a temporary measure rather than a long-term solution.