Ethena's ENA Surges as Revenue-Funded Buyback Proposal Gains Traction
Vexoda Newsroom
The Ethena Foundation has proposed using 95% of net protocol revenue for ENA token buybacks, a move that has spurred a significant price increase for the native token.
The native token of the Ethena synthetic dollar protocol, ENA, experienced a notable price surge following the announcement of several key ecosystem changes by the Ethena Foundation. Central to these changes is a pivotal proposal to implement revenue-funded buybacks of the ENA token, alongside the completion of buyouts for certain early investor holdings. These developments aim to bolster the token's value proposition and ecosystem stability for its participants.
The core of the announcement revolves around a proposed fee-switch mechanism. This initiative, currently open for tokenholder vote, stipulates that 95% of the net revenue generated by Ethena's primary business operations will be channeled into repurchasing ENA tokens from the open market. This action is contingent on Ethena's synthetic dollar, USDe, reaching a circulating supply milestone of $7.5 billion, indicating a phased approach to the buyback strategy.
The ENA token responded positively to this news, climbing over 10% in the 24 hours preceding the report and showing a substantial 27% gain over the preceding week. At the time of reporting, ENA was trading above $0.17. This price action reflects growing investor confidence in the proposed tokenomics shift and the potential for increased demand driven by the buyback mechanism, especially as the community has shown strong initial support for the proposal in early voting.
In addition to the buyback proposal, the Ethena Foundation confirmed it has successfully repurchased locked ENA tokens from specific early seed investors over the past nine months. Furthermore, the foundation has reached an agreement with lead investors to consolidate and accelerate the release of remaining unvested allocations, scheduled for October 5th, replacing the previous monthly unlock schedule. This aims to streamline the token distribution process, while team tokens are set to remain under their original vesting terms.
Ethena's synthetic dollar, USDe, has established itself as a significant player in the stablecoin market, currently ranking as the sixth-largest stablecoin with a market capitalization of approximately $4 billion, according to DefiLlama. The protocol's growth and the strategic importance of its native token, ENA, are underscored by past investments, such as the $20 million stake taken by M2 Capital in September 2025, highlighting the broader financial ecosystem's interest in Ethena's development.
The implications of this revenue-funded buyback model are significant for ENA's tokenomics and market dynamics. By directly linking protocol revenue to ENA repurchases, the proposal creates a clear demand driver for the token, potentially enhancing its value and reducing circulating supply over time. This could foster a more robust ecosystem by incentivizing long-term holding and participation, aligning investor interests with the protocol's success and growth trajectory.
Source: Cointelegraph. Summarized and rewritten by the Vexoda Newsroom. This is market news, not financial advice.