Ethena Revamps Tokenomics: Buybacks and Fee Switch for ENA

Ethena Foundation announces major tokenomics shifts, including ENA buybacks, removing supply overhang, and a fee switch proposal to drive protocol value.

The Ethena Foundation has bought back locked tokens from specific investors who sold ENA over the past nine months, while a new proposal suggests using net business revenue to fund ongoing token buyback programs.

This shift goes beyond a one-time purchase. The Ethena Foundation and leading investors have agreed to eliminate future pressure from monthly unlocks, though team tokens will remain locked according to the original schedule. Simultaneously, a new agreement with Ethena Labs transfers intellectual property and the economic value generated by the protocol to the foundation.

Ethena Buys Out Investors Who Previously Sold ENA

The first measure specifically targets large investors who sold ENA during the last nine months. Instead of waiting for these tokens to gradually unlock and potentially hit the market, the Foundation has bought out all their remaining locked holdings.

This move directly addresses the so-called “token overhang”—future supply that the market anticipates, which can weigh on prices even before the tokens are actually released.

The issue is far from theoretical. ENA follows a multi-year schedule involving investors and core contributors. Before these recent changes, Tokenomist data showed approximately 9.83 billion ENA, or 65.5% of the total supply, as already unlocked, with the schedule extending through 2028.

Ethena is taking a second step to resolve this issue. The Foundation and lead investors have agreed to waive rights to a portion of unallocated investor tokens, effectively cancelling future monthly unlocks. Tokens designated for the team are not included in this change and will continue to follow their original vesting schedule.

Ethena Revenue Could Become a Permanent ENA Buyer

The most significant change for long-term tokenomics stems from a proposal to activate a “fee switch.”

If approved, net revenue generated by business lines under the Ethena brand will be used for programmatic ENA buybacks from the open market.

The proposal has already entered the governance process, and the Foundation reports it has received approval from the Risk Committee.

This fundamentally alters the economic relationship between protocol growth and the token.

Until now, increased usage of Ethena products did not necessarily translate to proportional demand for ENA. Under the buyback mechanism, a portion of the ecosystem’s economic activity can systematically return to the market as buying pressure for the token.

This discussion is not new. Parameters for activating the fee switch were agreed upon as early as 2025, followed by work on a specific revenue distribution model. In March 2026, a separate analysis of potential models was published on the governance forum.

The current proposal now outlines a much more concrete direction: net revenue leads directly to ENA purchases.

Ethena Separates Protocol Value from Labs Shareholders

The third change is less visible to the market but may be the most critical for the project’s structure.

The Ethena Foundation and Ethena Labs have signed a “Master Framework Agreement,” under which the intellectual property and value accumulated by the protocol are transferred exclusively to the foundation and placed under the management of token holders.

Meanwhile, investors holding stakes in Ethena Labs will no longer be entitled to residual cash flows from this value.

This addresses a complex issue in crypto projects that maintain both a token and a private company. If the most valuable IP and revenue remain within the corporate entity, shareholders may capture the economic value while token holders are left primarily with governance rights.

Ethena is attempting to eliminate this divide entirely.

Four Changes Attacking the Problem from Two Sides

Taken together, these decisions represent two distinct movements in the tokenomics model:

On the Supply Side:

• Locked ENA from specific investors is being bought back.
• A portion of future supply from monthly unlocks is being removed.
• The vesting schedule for team tokens remains unchanged.

On the Demand Side:

• Net business revenue can now fund buybacks.
• Protocol value and IP are transferred to the foundation.
• Management of these assets is tied to ENA holders.

This is more significant than a standard buyback announcement. Ethena is simultaneously attempting to reduce the structural supply of ENA and create a new source of structural demand.

However, the final result will depend on the actual revenue generated by the business lines and the final approval and parameters of the fee switch. The proposal itself does not guarantee an ENA price increase, but if the mechanism is activated, the token’s economy will be much more directly linked to the financial performance of the Ethena ecosystem.