There is a problem with Ethena's 95% repurchase plan: the trigger price is 50% higher than the curr

The Ethena Foundation proposes to use 95% of the net agreement revenue to repurchase ENA, provided that USDe supply targets are met first.

The Ethena Foundation initiated a governance vote to use 95% of the net agreement revenue to ENA repurchase after USDe supply reaches a milestone, while terminating future monthly unlocks for investors.

The first milestone calls for USDe supplies to reach US$7.5 billion, while current supplies are below US$5 billion, down from a peak of nearly US$15 billion in October. This means that the mechanism requires a supply increase of about 50% to start.

ENA's current price is US$0.1677, up 10.4%, leading the market against the backdrop of declines in 87 of the 100 assets tracked.

Details of the proposal

The Ethena Foundation announced four adjustments to the ENA economic model on August 27, and the market immediately responded. The token rose 10.4% to $0.1677, while most markets fell, making it the strongest performing large-cap asset of the day.

The proposal is detailed and directly points to the two major criticisms the token has faced since its launch. It also contains a condition that most reports do not associate with current data.

What exactly did Ethena propose?

Among the four adjustments, two are structural adjustments and two are conditional adjustments.

Structural adjustments are not affected by market conditions and will take effect immediately. The Ethena Foundation will repurchase locked ENA from specific seed investors and end future monthly unlocks for investors. This removes the continuing supply pressure that has suppressed ENA's gains since 2024 and is the more immediate value of the two announcements.

Conditional adjustments depend on growth. A governance vote (available in full at the Ethena Governance Forum) will activate a fee switch mechanism that allocates 5% to more than 15% of total revenue to the Ethena Foundation when USDe circulation reaches various milestones such as USDe circulation reaches US$7.5 billion to more than $15 billion. Of the funds collected, 95% will be used for ENA repos in the secondary market and 5% for growth. A separate agreement would attribute most of the intellectual property and economic benefits associated with the agreement to foundations and ecosystems rather than shareholders of Ethena Labs.

Why are milestones more important than 95%?

Because 95% of zeroes are still zeroes and the trigger condition has not yet been reached.

USDe supply has dropped below US$5 billion, down from a peak of nearly US$15 billion in October and US$11.7 billion in August 2025. The threshold for starting the first fee-switch milestone is $7.5 billion. This means that the mechanism requires a supply increase of about 50% to produce the first repurchase.

The number of "95%" is extremely powerful in news headlines and is true. But it is only a proportion of an allocation to a pool of funds that will only open above the threshold currently far below the agreement. For other repurchase mechanisms, there is also a view that authorization is an upper limit, not a timetable, and the key lies in the actual speed of execution.

Fee switching is a governance decision designed to channel part of the agreement revenue to token holders through repurchase or distribution, rather than leaving it entirely to users or operating companies.

Can USDe supply recover to US$7.5 billion?

It has reached higher levels before, which is the strongest reason for bullish; the reason for its decline is the reason for caution.

USDe is a synthetic U.S. dollar backed by delta-neutral positions: Ethena holds spot crypto assets while shorting an equal amount of perpetual futures contracts, thereby capturing the capital rates paid by leveraged bulls. This funding rate is revenue and is proportional to the level of bullish leverage; current funding rate data from major exchanges can be found on relevant platforms.

Supply shrank from US$15 billion to below US$5 billion, reflecting the weak environment in the crypto derivatives market. When the capital rate is compressed, the yield on the pledge USDe decreases, and the funds will flow to other higher-yielding venues. Supply growth therefore depends on continued bullish positions in the derivatives market, which is what is currently missing.

This view was mentioned when ENA traded at $0.1323 on August 21, when the token's annualized revenue multiple was calculated to be approximately 1.1 times. The view at the time was that the multiple seemed unbelievably low because the market was pricing its expected cyclical revenue. The subsequent contraction in supply is an intuitive manifestation of this cyclical nature.

What is ENA's current revenue multiple?

is approximately 1.2 times, still among the lowest levels of all tokens with real income that the agency has measured.

Ethena recorded charges of US$4,034,157 in 24 hours, all of which were included in agreement revenue, which would be approximately US$1.47 billion annualized. At current prices, its market value is close to US$1.8 billion, giving ENA an annualized revenue multiple of approximately 1.2 times.

For comparison, Hyperliquid's trading multiple is about 41 times, compared with 24 times three weeks ago. Most of the top 100 tokens have no revenue at all.

The boundary for this indicator is consistent with that described a week ago and has not changed. Annualized income under favorable conditions for a single day is not a stable basis. It is just a snapshot of the model's profitability when funding rates are positive, while USDe contraction shows what happens when funding rates are not positive.

What are the risks to the plan?

Emissions, timing, and even if buybacks start, the scale may be too small to help.

Independent analysis estimates that ENA will still face scheduled emissions of more than US$300 million in 2026 at current prices, and simulated an annualized repurchase scale of approximately US$26 million under one scenario. Based on this figure, repurchase volume only accounts for about 0.1% of daily trading volume, well below the 1% to 2% commonly believed to be needed to influence the market.

Ending monthly unlocks for future investors changes this part of the arithmetic, which may be the more important item in yesterday's announcement. However, scheduled emissions will not disappear because emissions stop in the future.

The proposal also faces a structural contradiction that cannot be completely resolved. The income used for ENA repurchases is the income that is not paid to holders of pledged USDe, and sUSDe's yield is the key to attracting deposits and driving supply towards milestones. Strengthening one lever will weaken the other.

Summary

Ethena proposes to use 95% of net agreement revenue for ENA repos, but the first milestone requires USDe supply to reach US$7.5 billion, compared with current levels below US$5 billion, which means approximately 50% growth is needed before any repos occur.

Termination of investor unlocking is real and effective immediately. Repurchase is real but conditional. The market has priced the two equally, but the difference between them is that the supply base needs to expand by 50% from what has shrunk by two-thirds since October. Pay attention to USDe supply, not the "95%" title; it is the key number that determines whether it all ultimately benefits the token.