Ethena Foundation has proposed directing most of the protocol’s net revenue into ENA buybacks, but only after USDe circulation reaches $7.5 billion. The measure is part of a broader restructuring package submitted to governance, with the vote scheduled to close on September 2.
Under the proposal, a fee switch would send 95% of Ethena’s net revenue to automated ENA purchases on the open market once the supply threshold is met. USDe currently has a circulating supply of approximately $4 billion to $4.6 billion, meaning it would need to grow by about 85% before the buyback mechanism could begin.
ENA rose between 16% and 23% intraday to roughly $0.17 after the plan emerged. The token had already gained more than 70% over the preceding week.
Buyback economics depend on USDe growth
Ethena estimates that reaching $7.5 billion in USDe circulation could make approximately $22.5 million in annualized revenue available for buybacks, assuming a 6% APY on the protocol’s underlying positions. Larger USDe supply milestones would increase the amount allocated to ENA purchases.
The structure also involves a trade-off for USDe holders. Allocating 95% of net revenue to buybacks could reduce the funds available for USDe yield distributions, which have been a key attraction for users of the synthetic dollar.
USDe’s supply previously peaked at about $15 billion in October 2025. Returning to $7.5 billion would therefore represent a recovery to roughly half of that high, while still requiring substantial growth from current levels.
Foundation outlines additional token changes
The buyback plan is one part of a three-part restructuring announced by the Ethena Foundation on August 27. The Foundation said it is conducting over-the-counter purchases of locked ENA from seed investors whose allocations exceed 0.25% of total supply. These investors had sold their stakes after ENA reached a peak on October 10, 2025. The transactions are intended to reduce the potential future supply overhang from those locked holdings.
Upcoming investor unlocks would also be consolidated into a single event on October 5, 2026, rather than being released over several months. Team tokens would remain locked under the proposal. An in-principle agreement expected in October 2026 would additionally place Ethena’s protocol intellectual property and financial benefits primarily with the Foundation, increasing its separation from Ethena Labs equity holders.
The buyback mechanism remains dependent on both USDe adoption and protocol revenue. If funding rates fall sharply or turn negative, revenue could decline even if USDe reaches the $7.5 billion target, potentially limiting the scale of ENA purchases. The governance vote on the restructuring package is due to conclude on September 2.
