Ether.Fi DAO Proposes $50 Million ETHFI Token Buyback Program Below $3

Ether.Fi DAO Proposes $50 Million ETHFI Token Buyback Program

The Ether.Fi DAO has put forth a new proposal to initiate a $50 million token buyback program for its native ETHFI token. This initiative, if approved, would authorize the Ether.Fi Foundation to purchase ETHFI from open markets or designated on-chain venues when the token's spot price is strictly below $3.00. The primary objectives include accumulating ETHFI tokens and increasing the proportion of protocol revenue allocated to buybacks under this price threshold. All transactions under this program are intended to be recorded on-chain and publicly reported.

The Event in Detail

The proposal outlines a structured approach to ETHFI token acquisition. The Ether.Fi Foundation would be empowered to utilize a portion of its treasury, up to an equivalent USD value of $50 million, to execute these buybacks. The key condition for activation is the ETHFI market price trading below $3.00. This threshold is significant given ETHFI's all-time high price of $8.53 reached on March 27, 2024. As of current market data, ETHFI is trading around $0.91, representing an 89.36% decrease from its peak. The circulating supply of Etherfi is 564,617,398 ETHFI, with a market capitalization of $512,493,049.

Financial Mechanics and Strategic Intent

The financial mechanism is a direct treasury-funded buyback, akin to corporate share repurchases. The Ether.Fi DAO intends for these buybacks to strengthen market confidence and reduce the circulating supply of ETHFI. The program also aims to progressively expand buyback capacity in proportion to protocol revenues, particularly while ETHFI remains below $3.00, ensuring efficient use of surplus revenue. This strategy aligns with a broader trend in the crypto space where protocols, including DEXs, oracle networks, and AI agent hubs, deploy revenue or profits for token buybacks, burns, and locking to reward long-term holders, mitigate market volatility, or smooth token unlocks. For instance, Griffin AI implemented a $2.5 million recovery and buyback program with transparent on-chain records. Similarly, Jupiter allocates 50% of its protocol fees to regular JUP buybacks with three-year token locks. The Ether.Fi DAO's governance structure, similar to Threshold Network's two-pronged system of a Token Holder DAO and Elected Council, ensures accountability and separate responsibilities in such financial decisions.

Broader Market Implications

This proposed buyback program by Ether.Fi DAO could have several implications for the broader Web3 ecosystem and investor sentiment. A successful implementation could demonstrate a proactive approach by a decentralized autonomous organization to manage token value and reward its community. By setting a specific price threshold, the DAO aims to establish a de facto floor, potentially reducing downside volatility and signaling confidence in the long-term value of ETHFI. Such actions contribute to the maturation of tokenomics models within DeFi, where protocols increasingly leverage their treasuries and revenues to create sustainable value propositions for their native assets. The transparency of on-chain recording and public reporting for buyback transactions reinforces trust, a critical factor in the decentralized finance landscape. If effective, this strategy could encourage other DeFi protocols to adopt similar mechanisms for treasury management and token value accrual, further solidifying the "buyback wave" observed in the crypto market in 2025.