The Ethena Foundation has announced a series of changes aimed at reducing investor token supply pressure and giving ENA holders a greater connection to the protocol’s economic value.
The proposed changes include buying out early seed investors, ending future monthly investor unlocks, transferring protocol value and intellectual property to the Foundation, and putting a revenue-funded ENA buyback mechanism to a governance vote.
Ethena Removes Future VC Unlocks
The Foundation said it has reached agreements to purchase the remaining locked ENA held by major early investors that had sold some of their tokens during the previous nine months.
As part of the restructuring, future monthly VC token unlocks will be eliminated, removing a significant source of potential additional supply from the market.
Team allocations will remain subject to their existing vesting schedules.
The move is designed to reduce the investor overhang that has affected ENA’s token economics while giving the ecosystem greater visibility over future circulating supply.
Protocol Value to Be Controlled by the Foundation
Ethena is also establishing a Master Framework Agreement between the Ethena Foundation and Ethena Labs.
Under the arrangement, the Foundation will control the protocol’s intellectual property and accumulated economic value. The Foundation said the structure is governed by ENA token holders and does not leave a residual cash-flow claim for equity investors in Ethena Labs.
This effectively shifts the focus of the protocol’s economic value toward the ecosystem and its token-holder governance structure.
ENA Buyback Proposal Moves to Governance
The most significant change for ENA holders could come from a separate governance proposal.
A proposal that has already received approval from Ethena’s Risk Committee would activate a fee switch, directing net revenue generated across Ethena’s business lines toward systematic ENA purchases.
If approved by governance, the mechanism would create a direct link between protocol revenue and ENA demand.
Rather than allowing protocol earnings to remain disconnected from the token, revenue would be used to purchase ENA programmatically in the market.
A Shift in ENA’s Token Economics
Taken together, the changes represent a significant restructuring of Ethena’s token model.
Ending future VC unlocks could reduce potential selling pressure, while transferring protocol value to the Foundation changes how the ecosystem’s economic interests are organized.
The proposed buyback mechanism would go a step further by potentially connecting the growth of Ethena’s businesses with recurring demand for ENA.
The governance vote is currently live on Snapshot, meaning ENA holders will ultimately determine whether protocol revenue is used for the proposed buyback program.
If approved, Ethena would move toward a model in which reduced investor supply pressure, community governance and protocol-generated revenue all play a more direct role in ENA’s long-term value proposition.
