The Ethena protocol, issuer of the synthetic dollar USDe, has just announced a major strategic overhaul of its tokenomics. Through a governance vote, the foundation has proposed allocating 95% of its net revenue to buy back its native token, ENA. This initiative is part of a comprehensive plan to restructure value creation around the token, in direct response to recurring criticism regarding sell pressure from early investors and the monthly unlock schedule.
To clean up its structure, the foundation carried out a significant operation by repurchasing, via over-the-counter trades, the locked tokens belonging to early investors who had previously liquidated positions. This maneuver eliminates the overhang associated with future asset sales by these partners. Concurrently, the protocol is ending progressive monthly unlocks for institutional investors in favor of a single deadline set for October 5th. Moving forward, only tokens allocated to the team and the ecosystem will remain locked, thereby clarifying the circulating supply in the market.
The buyback mechanism is designed to be dynamic and proportional to the protocol's adoption: it will be triggered based on thresholds indexed to the volume of USDe in circulation. Revenue generated from three pillars, including USDe savings, white-label stablecoins, and the upcoming Ethena [X] service, will serve as leverage for this massive buyback. This structural shift is complemented by a reorganization of intellectual property, with the majority transferred to the foundation to safeguard the value produced by the protocol, independent of the interests of Ethena Labs' equity holders.
This approach, which is gaining popularity among DeFi protocols like Hyperliquid or LayerZero, reflects a paradigm shift: the goal is to correlate an asset's valuation directly with real protocol activity rather than speculative dynamics. However, the effectiveness of this measure remains conditional on the sustainability of revenues, which are themselves dependent on macroeconomic conditions and interest rates. While the ENA price has already reacted positively to these announcements, the viability of the model will be put to the test starting in October with the transition to a single release of the remaining tokens.