Ethena Foundation has proposed a major restructuring of ENA’s token economics that would connect protocol revenue to programmatic token buybacks while ending the recurring monthly unlock schedule for original investors. The centerpiece is an ENA fee-switch proposal now subject to tokenholder approval. The changes are designed to reduce recurring investor supply while establishing a direct mechanism through which growth in Ethena’s businesses can generate ENA purchases.
The mechanism is conditional rather than immediate. USDe circulating supply currently stands near $4.07 billion under the proposal’s data, while the first buyback threshold is $7.5 billion. At that level, 5% of gross protocol revenue would be redirected to the Foundation, rising to 10% at $10 billion, 15% at $15 billion and 20% at $20 billion. Once revenue reaches the Foundation through this mechanism, 95% would be used for ENA buybacks and 5% for ecosystem growth.
Buybacks Scale With USDe Supply
The distinction between those percentages is important. The proposal does not immediately direct 95% of all Ethena revenue toward ENA. Instead, the Foundation receives a progressively larger share as USDe crosses predefined supply thresholds, and 95% of that allocation funds purchases. At current USDe supply, the proposed fee switch would direct nothing toward buybacks because the initial $7.5 billion trigger has not been reached.
Supporting analysis from Blockworks Advisory backtested the framework across 705 days of historical USDe supply, revenue and ENA pricing. Using a 14-day supply average, the model would have generated an annualized $52.7 million in purchases during the 118 days when the mechanism was active. Across the full historical period, however, the annualized figure falls to $8.82 million. The larger $52.7 million estimate therefore describes the program while switched on, not a continuous annual buyback commitment.
The economic backdrop remains sensitive to Ethena’s revenue model. The Financial Times has previously examined USDe’s reliance on delta-neutral crypto positions and funding-rate income, noting that returns can weaken when derivatives funding conditions deteriorate. That sensitivity matters because the fee switch ultimately depends on Ethena continuing to generate sufficient revenue while also growing USDe supply.
Investor Unlocks and Protocol Ownership Are Also Changing
Alongside the fee switch, Ethena Foundation said it bought the remaining locked allocations of certain major seed investors that had been selling ENA following the October 2025 market peak. The Foundation and lead investors have also agreed to release remaining original investor tokens in a final event beginning October 5, replacing the monthly vesting schedule. Team allocations remain on their existing schedules. The restructuring removes recurring monthly investor unlocks, but it does not mean every remaining locked ENA token disappears from circulation.
Ethena Labs and the Foundation have separately reached an agreement in principle covering ownership of protocol intellectual property and economic value. Under the planned framework, substantially all material Ethena IP would be assigned or exclusively licensed to the Foundation and ecosystem, while economic benefits associated with the protocol would accrue there rather than to Ethena Labs shareholders. The final framework is expected in October and remains an agreement in principle until its documentation is completed.
Together, the measures would materially change ENA’s relationship with the businesses surrounding USDe if governance approves the fee switch and its supply thresholds are eventually reached. The immediate changes concern investor positioning and organizational structure, while meaningful revenue-funded ENA demand still depends on USDe recovering from roughly $4.07 billion to at least $7.5 billion in circulation.