Ethena proposes to use 95% of revenue for ENA buybacks

Ethena proposal: After USDe supply reaches US$7.5 billion, 95% of its net income will be used to buy back ENA

Ethena has proposed a governance proposal that once USDe supply reaches the US$7.5 billion threshold, 95% of the net income generated by its brand business will be used to purchase ENA tokens. At the same time, the agreement also plans to end monthly investor unlocks and separate the ecosystem economy from Ethena Labs equity.

Core Points

Ethena proposes to use 95% of net income to purchase ENA when USDe supply reaches US$7.5 billion for the first time. The Ethena Foundation has bought back locked ENA from some seed-round investors and plans to accelerate the unlocking of the remaining original investors. ENA rose about 23% to $0.17 in 24 hours and nearly doubled in just over a week. USDe supply is still below $5 billion after falling from a peak of nearly $15 billion in October last year. Ethena has expanded into institutional credit and distribution to seek sources of income beyond crypto funding rates.

According to the Ethena Foundation, the proposed changes aim to address two long-standing issues surrounding ENA: continued supply from early investor unlocking and uncertainty about how the economic value of the agreement is transmitted to token holders.

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The reform combines adjustments to the token supply schedule and a proposed fee switch that could create continued market purchase demand for ENA. It has also created a planned agreement under which most intellectual property and economic benefits related to the Ethena Agreement will be attributed to the foundation and ecosystem, rather than to shareholders of Ethena Labs. ENA reacted strongly to the announcement, rising about 23% to around $0.17 in the past 24 hours. The token nearly doubled in just over a week, continuing the gains seen in the recent rebound in the cryptocurrency market.

ENA buybacks could earn 95% of net income

Under the governance proposal, ENA holders are voting on a fee switch that links token purchases to USDe's circulating supply. Once USDe reaches the first threshold of US$7.5 billion, 95% of net revenue generated by Ethena's brand business will be used to programmatically purchase ENA. The remaining 5% will be reserved to fund ecosystem growth. As USDe liquidity reaches more milestones, the size of repurchase will increase, establishing a mechanism for growth in Ethena's business to translate into demand for ENA. The proposal responds to the question that has always been faced by governance tokens in decentralized finance: Can the revenue generated by the agreement ultimately bring economic benefits to the token itself? In the case of Ethena, the proposed structure would leverage revenue creation's open market demand for ENA rather than relying mainly on governance rights or expectations of future utility to maintain this connection.

This idea is not the first time Ethena has used token buybacks. In August 2025, it was reported that as USDe supply and agreement revenue climbed, a $260 million plan allocated approximately $5 million a day for the purchase of tokens. The latest proposal differs in that it links purchases to recurring net income and a preset USDe supply threshold, rather than relying solely on a fixed pool of funds.

Ethena embarks on removing pressure on ENA to unlock

In addition to the income proposal, the Ethena Foundation said it has bought back the remaining locked tokens from certain large seed investors who have been selling ENA for the past nine months. The remaining original investor allocations will also be unlocked under the accelerated plan, terminating the monthly release of venture capital tokens. Tokens allocated to Ethena's team will continue to be processed according to the original unlocking schedule. Ending monthly investor releases changes when remaining supplies enter circulation rather than completely removing these tokens. However, the foundation's repurchase of lock-in allocations from some seed round investors eliminated the positions of these holders who had previously been selling ENA.

Token unlocking has previously affected ENA transactions. In June 2025, approximately 41 million ENAs (valued at more than US$12 million at the time) were unlocked, triggering only limited market reaction, with tokens falling by about 1% that day. Recently, as ENA's institutional holdings have increased, the supply situation has become particularly important. Grayscale Investments included ENA in its decentralized financial funds in its asset rebalancing in the first quarter of 2026 and sold other fund components to raise purchase funds. Another channel of U.S. market access emerged in June when StablecoinX completed its merger with TLGY Acquisition Corp. and began trading on Nasdaq under the symbol USDE. The company holds approximately 3.029 billion ENAs, worth approximately $275 million based on the 30-day average price quoted at the time of trading, providing open market investors with access to the business built around the Ethena ecosystem.

Ethena seeks clear agreement on economic ownership

Another part of the reform involves the relationship between Ethena Labs, foundations and ENA holders. Under the principled agreement described by the foundation, almost all significant intellectual property rights and economic benefits related to the Ethena Agreement will belong to the foundation and the ecosystem, rather than to the equity holders of Ethena Labs. Relevant parties are expected to announce the agreement in October. Formally establishing this division can clarify which economic benefits belong to the development company's shareholders and which belong to the token governance ecosystem. The foundation proposed this arrangement along with the repurchase proposal and investor unlocking changes, rather than as a separate corporate reorganization.

In 2026, institutions 'participation in ENA will increase. Coinbase Ventures purchased ENA on the open market in June rather than obtaining tokens through discounted private placement, while Coinbase and Ethena announced plans to develop on-chain financial and savings products. As previously reported in June, Ethena did not disclose the number of ENAs purchased by Coinbase Ventures, the average purchase price or the relevant wallet address. The first product of the partnership was launched later that month, with Coinbase launching a high-yield USDC vault that uses Morpho infrastructure and is planned for distribution by Steakhouse Financial. The product includes Etha-related assets in its collateral structure and allows users to access the vault through the Coinbase app.

USDe supply is still well below peak

Although ENA has risen, Ethena is still struggling to rebuild demand for USDe after the token shrank sharply from its 2025 high. USDe supply has dropped below US$5 billion from a peak of nearly US$15 billion in October. The decline came after weak conditions in the crypto derivatives market, and funding rates were an important part of Ethena's strategy to generate returns. USDe is different from reserve-backed stablecoins in that Ethena uses collateral and derivative positions to maintain its U.S. dollar exposure. Therefore, the return available to the structure will change as the status of derivatives funds changes.

During previous expansion periods, USDe supply had reached US$11.7 billion as of August 2025, while Ethena reported cumulative total interest income of more than US$500 million. Weekly negotiated revenue at the time was $13.4 million, while USDe was minted at the same time. However, by June 2026, the decline in USDe supply was evident, and Ethena turned to institutional distribution and new uses of its capital. One such approach is traditional asset management. Janus Henderson invested in ENA in June and began exploring ways to use USDe for treasury management and distribution through investment products. The asset management company was managing approximately $480 billion in assets when the agreement was reached. Ethena also plans to allocate $250 million to Securitize's tokenized AAA mortgage voucher fund in June, when the product expands to Solana. The fund invests in dollar-denominated AAA CLO tranches, with BNY serving as custodian and deputy adviser. This planned allocation provides Erena Capital with another avenue to enter traditional credit markets. Institutional access expanded again in late June, when BlackRock integrated USDe into its Aladdin investment and risk management platform. The integration allows institutions using the system to access USDe through existing workflows, and the announcement also includes a $100 million liquidity arrangement plan associated with the BlackRock tokenized BUIDL Money Market Fund.

New credit facility reduces reliance on crypto funding rates

Ethena added another source of potential revenue in August through a $1 billion arrangement with institutional crypto master broker FalconX. The warehouse arrangement, announced on August 19, allows assets supporting USDe to be deployed into overcollateralized institutional loans. This arrangement provides Ethena with a source of revenue beyond crypto-derivative fund-rate transactions, which have historically been a core part of USDe's revenue model. The announcement also contributed to ENA's recent price increase. In the days after the FalconX deal was reached, ENA rose 48%, and several altcoins outperformed Bitcoin. At the same time, Coinbase has provided a U.S. distribution channel for Etha-related products. Its high-yield USDC vault was launched in June through Morpho and Steakhouse Financial, and Etha-related assets were included in the collateral framework. The vault is accessible through the Coinbase consumer app, while the underlying lending activity runs on the on-chain infrastructure. Janus Henderson's participation adds another institutional avenue. According to a June announcement, in addition to investing in ENA, the asset management company also explored ways to distribute USDe through investment products.