CoinDesk
Ethena's ENA climbed 23% over the past 24 hours to $0.17, doubling in just over a week as the protocol's foundation rolled out a sweeping overhaul of the token's economics. The plan kills the monthly VC unlock schedule, routes up to 95% of net protocol revenue into programmatic ENA buybacks once USDe circulation clears a $7.5 billion threshold, and shifts the protocol's intellectual property and economic upside from Ethena Labs shareholders to the foundation and wider ecosystem.
Why it matters
The overhaul directly targets the two issues that have dragged on ENA since launch: persistent selling pressure from early-investor unlocks, and uncertainty over how much of Ethena's economic value actually accrues to tokenholders. The foundation bought back locked tokens from certain large seed investors that had been selling over the past nine months, accelerating the remaining original investor unlocks in the process. Team tokens stay on their existing vesting schedules. The fee switch vote, if it passes, would create recurring buy pressure that scales with USDe growth rather than relying on discretionary treasury moves.
The intellectual-property and economic-upside agreement in principle with Ethena Labs, expected to publish in October, draws a cleaner line between tokenholders and corporate equity holders. For a protocol that pulled in heavy funding-rate-driven revenue during the 2024 bull market, that separation answers the recurring investor question of why hold ENA when Ethena Labs equity could otherwise capture the upside.
Market impact
The overhaul lands against a sharp reversal for USDe itself, whose circulating supply has fallen below $5 billion from a peak near $15 billion in October as derivatives funding rates cooled. Ethena has been hunting alternative yield sources: a $1 billion facility with FalconX channels USDe backing into overcollateralized institutional loans, Janus Henderson invested in ENA in June and is exploring USDe distribution, and a Coinbase tie-up is in motion.
Frequently asked questions
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Why did Ethena's ENA surge 23% on Thursday?
The foundation scrapped the monthly VC unlock schedule, bought back locked tokens from early investors that had been selling, and put a fee switch to tokenholder vote that routes 95% of net protocol revenue to ENA buybacks once USDe circulation clears $7.5 billion.
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What does the Ethena fee switch proposal do?
If approved, the fee switch would direct 95% of net revenue from Ethena-branded businesses to programmatic ENA purchases once USDe circulation reaches $7.5 billion, with the remaining 5% funding protocol growth.
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Why is USDe circulation the trigger for the buyback plan?
The 95% revenue-to-buyback allocation only activates after USDe circulation clears the $7.5 billion threshold. With current supply below $5 billion, the buyback mechanism stays dormant until the synthetic dollar regrows roughly $2.5 billion.
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What happened to Ethena's USDe supply?
USDe circulation has fallen below $5 billion from a peak near $15 billion in October, as the derivatives funding rates that drive its yield dried up alongside the broader crypto cooldown.
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What does the Ethena Labs and foundation agreement mean for ENA holders?
The agreement in principle moves substantially all material intellectual property and economic upside from Ethena Labs shareholders to the foundation and ecosystem. Expected to publish in October, it draws a cleaner line between tokenholder economics and corporate equity value.
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