Key Takeaways:
Ethena's governance overhaul removes the monthly investor-unlock overhang and ties protocol revenue directly to ENA holders.
Ethena Foundation bought out early investors' locked ENA tokens and will end recurring VC unlocks, redirecting 95% of protocol net profit to automatic token buybacks.
The foundation said on Aug. 27 that it purchased all locked tokens held by major early investors through over-the-counter trades over the past two weeks, as long as those investors had sold ENA at least once after the token peaked in October 2025.
The buyout targeted investors allocated more than 0.25% of total supply, except one wallet that said it planned to keep its holdings. Remaining investor-held tokens will become freely tradable in a single release before Oct. 5, ending the recurring pressure from monthly unlocks. After the overhaul, about 12% of total supply will remain locked, limited to team, ecosystem and foundation holdings.
The changes aim to remove sell-side pressure on ENA and direct protocol economics toward token holders. A governance vote is underway on Snapshot to introduce automatic ENA purchases using 95% of net profit across all Ethena-branded businesses, with buybacks beginning once USDe supply reaches $7.5 billion.
Under the proposal, 95% of net profit attributable to the foundation across all Ethena-branded businesses would be used to automatically buy ENA in the market, with the remaining 5% reserved for growth. The share of revenue allocated to buybacks would rise from 5% to as much as 25% when USDe supply surpasses milestones of $7.5 billion, $10 billion and $15 billion. The foundation also set a goal of expanding USDe supply to more than $100 billion within five years.
The Ethena Foundation and Ethena Labs, the protocol's developer, also reached agreement in principle on a Master Framework Agreement. Under the arrangement, core protocol intellectual property and any economic benefits from events such as a business sale would belong to the foundation and the broader ecosystem, not Ethena Labs shareholders. The foundation said Ethena Labs shareholders have never received $1 of protocol revenue in any form, and the agreement formalizes the existing structure. The full text will be disclosed in October.
The overhaul sets a precedent for DeFi governance, where protocols increasingly use buybacks and unlock restructuring to support token prices. Ethena also plans to unveil Ethena X as soon as next week, its third new business after the USDe Savings deposit service and the WhiteLabel stablecoin issuance support service.
This article is for informational purposes only and does not constitute investment advice.
