Ethena Foundation proposes fee switch routing 100% of net revenue to ENA buybacks

The Ethena Foundation has launched a major economic overhaul, opening a governance vote on a fee switch to route 95% of its net protocol revenue to ENA token buybacks. However, the buybacks only trigger once USDe circulating supply reaches $7.5 billion, nearly double its current level of roughly $4 billion. To address token supply overhang, the Foundation bought out locked ENA from selling seed investors and agreed to end monthly VC unlocks by releasing all remaining investor tokens on October 5, 2026.

ENA seed investor buyout

• ▪One seed investor wallet declined the Ethena Foundation's buyout offer for locked ENA tokens, citing continued conviction in the Ethena protocol
• ▪The Ethena Foundation executed an over-the-counter buyout of all locked ENA tokens from certain major seed investors who had sold any of their holdings since the October 10, 2025 market peak
• ▪The Ethena Foundation offered seed investors who had not sold any ENA since October 10, 2025 the option to sell their locked tokens at their original purchase price, but no investors accepted
• ▪The Ethena Foundation's buyout targeted seed investors originally allocated more than 0.25% of the total ENA supply, executing the transactions over a two-week period preceding August 27, 2026

Monthly investor unlock termination

• ▪The Ethena Foundation and lead investors agreed to release all remaining original investor ENA tokens in a single batch on October 5, 2026, ending the monthly unlock schedule
• ▪StablecoinX, which holds approximately 20% of the total ENA supply, remains subject to a separate lockup schedule outlined in its publicly filed token purchase agreement
• ▪Ethena team tokens will remain locked under their original vesting schedules, leaving approximately 12% of the ENA supply locked and unvested as team, ecosystem, and foundation holdings

Protocol IP assignment to Foundation

• ▪The proposed Master Framework Agreement between Ethena Labs and the Ethena Foundation is expected to be published in October 2026
• ▪Under the proposed Master Framework Agreement, Ethena Labs equity holders will retain no residual claim on protocol cash flows or proceeds from any future sale of the underlying business
• ▪Ethena Foundation and Ethena Labs reached an agreement in principle on a Master Framework Agreement to assign substantially all material protocol intellectual property and economic upside to the Foundation

Fee switch for ENA buybacks

• ▪If approved, the Ethena fee switch will route 95% of the net revenue paid to the Ethena Foundation across its core business lines to ENA buybacks, with the remaining 5% funding growth
• ▪The Ethena Foundation opened a Snapshot governance vote, running through September 2, 2026, to implement a fee switch directing protocol revenue toward programmatic ENA token buybacks
• ▪The Ethena fee switch will apply to net revenue generated across three core business lines: USDe savings, white-label stablecoins, and the upcoming Ethena X platform

USDe supply-based revenue ladder

• ▪The proposed Ethena fee switch requires USDe circulating supply to reach a milestone of $7.5 billion before any protocol revenue is diverted to ENA buybacks
• ▪The circulating supply of USDe sits between $4.04 billion and $4.6 billion, down from its October 2025 peak of approximately $15 billion
• ▪The Ethena fee switch revenue ladder routes 5% of gross protocol revenue to the Foundation at $7.5 billion USDe supply, scaling up to 20% at $20 billion and 25% above $25 billion
• ▪A backtest by Blockworks Advisory showed the Ethena fee switch trigger would have been active for 118 of the last 705 days, purchasing ENA at an annualized pace of $52.7 million

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