The Ethena Foundation has initiated a vote on a radical change to the ecosystem's revenue distribution model. The proposal suggests directing nearly all net revenue toward a programmatic buyback of the governance token ENA from the open market. This is a step that could fundamentally reshape the project's economics and its appeal to long-term holders.
Shifting Fees and a New Direction
If approved by the community, all net proceeds from Ethena products, including the USDe stablecoin, will be converted into market purchases of ENA. This means abandoning the previous model, where revenue was distributed between rewards for sUSDe holders and partner programs. Essentially, the project is pivoting from incentivizing yield to directly reducing token supply.
The Risk Committee has already given preliminary approval, and the vote has been launched on the Snapshot platform. However, exact timelines have not been disclosed, and the final decision rests with ENA holders.
Value Consolidation and Protection Against Unlocks
In parallel, Ethena Labs and the Foundation have entered into a Master Framework Agreement, under which all intellectual property and rights to the value generated by the protocol come under the organization's control. Management of these assets will be carried out through the governance mechanisms of ENA holders, stripping Ethena Labs venture investors of residual rights to cash flows.
A key aspect is also the change in tokenomics. The Foundation has agreed with major venture investors to cancel future monthly unlocks of their tokens. Recall that this category held 25% of ENA's fixed supply (3.75 billion coins) with a three-year vesting schedule after a one-year cliff. Now, the unlocked assets of investors who agreed to the new scheme are removed from the schedule. Team assets will continue to unlock according to the original plan.
Moreover, the Foundation reported the buyback of remaining locked ENA from several large early investors who had been selling tokens over the past nine months. Deal details have not been disclosed.
Market Impact and Prospects
The initiative aims to address two key problems for ENA: creating sustainable demand through a buyback mechanism and eliminating price pressure from future unlocks. The market reaction was swift — over the past day, ENA's price rose nearly 12% to $0.16. For comparison, in April 2024, the asset traded at $1.5 at its peak.
ENA's market capitalization stands at $1.54 billion, with total value locked in Ethena at $4.5 billion, of which ~$4 billion is in USDe. It is worth noting that in August 2025, the project's stablecoin was among the top three in its segment, but over three months, its supply shrank by more than 50% due to declining yields.
My analysis: This is a bold and, in my view, timely move. The shift to a buyback model demonstrates the project's maturity, recognizing that in the current cycle, the market values deflationary mechanisms over yield promises. However, success will depend on Ethena's ability to generate stable revenue without the previous incentives for USDe holders. If yields drop too sharply, we could see further capital outflows from the stablecoin, calling the sustainability of the entire model into question.