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Following
ENA Ethena launches token repurchase, fee switch proposals and structural reforms to align ENA with agreement growth
Synthetic Dollar Agreement Ethena has announced a series of governance and token economy reforms aimed at reshaping the relationship between its ENA tokens and the underlying value of the agreement. These reforms include buying back lock-in tokens held by early investors, unifying token and equity structures, introducing an income-based repurchase mechanism, and eliminating monthly unlock programs for venture capitalists.
Key reforms announced by the Ethena Foundation
The Ethena Foundation said it has completed the repurchase of all locked tokens held by some large seed-round investors who have sold ENA in the past nine months. The move effectively eliminated potential selling pressure from these early supporters. In addition, the foundation signed a master framework agreement with Ethena Labs to transfer the intellectual property rights of the agreement and all value generated by it. As a result, the remaining cash flow associated with agreement growth will no longer flow to equity investors in Ethena Labs, but will be controlled by ENA token holders through governance.
The foundation also confirmed that a "fee switch" governance proposal has been formally submitted, which will use net income generated by each business unit under the Ethena brand to conduct programmatic ENA repurchase. The proposal has been approved by the Risk Committee. In addition, Ethena said that by releasing all unlocked tokens in one time, the continued selling pressure caused by monthly unlocking of future venture capital has been completely eliminated. Tokens held by the core team will still follow the existing lockdown and release plan.
What this means for ENA holders and the broader DeFi ecosystem
These reforms aim to strengthen the link between ENA tokens and the value of the agreement. By aligning the interests of token holders with the performance of the agreement, Ethena is addressing a common criticism in the crypto space-that early investors and equity holders profit at the expense of token holders. Repurchase and fee switches are designed to allow ENA to more directly link to agreement revenue, potentially increasing its appeal to long-term investors.
Impact on token economy and governance
Removing monthly venture capital unlocking removes a known source of selling pressure, which helps support token price stability. If fee switches are approved by governance, a direct ENA repurchase mechanism will be created, potentially reducing the amount of circulating supply over time. The transfer of intellectual property and cash flow to foundations also centralizes control under ENA governance, making tokens no longer just a utility asset.
Conclusion
Ethena's latest announcement represents an important step towards aligning the agreement's economic structure with the token community. By reducing selling pressure, enabling income-based buybacks, and consolidating control under governance, the foundation is betting that closer coupling between ENA and agreement performance will drive long-term value. As with all governance proposals, the actual impact will depend on implementation and community engagement, but the direction is clear: Ethena is moving towards a more token-centric model.
FAQs
Question: What is Ethena's "fee switch" proposal?
Fee Switch is a governance proposal that will use net income from Ethena's business units to repurchase ENA tokens in a programmatic manner, establishing a direct link between agreement performance and token value.
Q: What impact does the repurchase of locked coins have on ENA holders?
Repurals remove the risk of potential selling pressure from early investors who have sold ENA in the past nine months, which helps stabilize token prices and reduces uncertainty for current holders.
Question: Will canceling monthly unlocking affect the core team's tokens?
No. Tokens held by the core team will still follow the existing lockdown and release plan. Only tokens that were not unlocked by early investors were released at one time, eliminating monthly unlocks for future venture capitalists.
