Ethena's governance token ENA jumped roughly 10% after the project's foundation floated a plan to direct nearly all of its net protocol revenue toward buying back the token, alongside a proposal to purchase supply held by prominent early backers.
Revenue-Funded Buybacks
The Ethena Foundation is asking token holders to approve a mechanism that would convert 95% of the protocol's net revenue into ENA buybacks. If passed, the so-called fee switch would channel the bulk of earnings generated by the platform back into the market for its native token, a move designed to tie the asset's value more closely to the protocol's financial performance.
The proposal reflects a growing trend among decentralized finance projects seeking to reward token holders directly rather than letting fees accumulate in a treasury. By committing such a large share of revenue to buybacks, Ethena aims to create consistent buy-side demand for ENA.
Nearly all of the protocol's net revenue would flow straight into buying back its own token.
Buying Out Early Investors
Beyond the fee switch, the foundation put forward a separate plan to acquire the ENA supply held by major early investors. Absorbing tokens from those large holders could reduce the risk of concentrated selling pressure and give the community more control over circulating supply.
The dual proposals now head to a governance vote, where ENA holders will decide whether to adopt the measures. Market participants responded positively to the announcements, sending the token higher as traders weighed the potential impact of steady buyback demand.
- A fee switch converting 95% of net protocol revenue into ENA buybacks
- A plan to purchase token supply held by early investors
- Both measures subject to a community governance vote
The outcome of the vote will determine whether Ethena moves ahead with one of the more aggressive value-accrual strategies seen in the DeFi sector, potentially setting a template for other protocols exploring similar approaches.