Ethena Foundation restructures token economics with buyback vote, seed-investor buyout
Regulation & Gov ·
The foundation behind ENA moved to remove sources of sell pressure while opening a path for protocol revenue to flow directly into token buybacks.
Ethena Foundation disclosed four changes to its token and governance structure, according to a report. The first: a buyout of all locked tokens held by certain major seed investors that had sold any ENA within the past 9 months, removing those holders' remaining unvested allocations from circulation entirely.
The second change reassigns intellectual property and protocol-accrued value exclusively to the Foundation under a new Master Framework Agreement with Ethena Labs. Under the arrangement, token holders govern that value with no residual cash flow directed to equity investors in the Labs entity — a structural shift meant to align protocol upside with ENA holders rather than private shareholders.
Third, a governance proposal is now live to implement a fee switch. Net revenue generated across all business lines operating under the Ethena brand would be used to programmatically buy back ENA on the open market, tying protocol performance directly to token demand rather than relying solely on emissions or incentive schedules.
The fourth measure addresses future unlock overhang: the Foundation and lead investors agreed to release unvested tokens now, eliminating the recurring monthly VC unlock schedule that has historically pressured the token. Team tokens are unaffected and remain locked per the original vesting terms, meaning the change targets investor supply specifically rather than internal allocations. The announcement was also posted directly by Ethena Foundation.
Taken together, the four measures compress two separate sources of dilution — investor selling and monthly unlocks — into a single resolved event, while the fee-switch proposal introduces a new demand mechanism contingent on governance approval. What remains unresolved is the outcome of the fee-switch vote itself, the specific revenue figures that would flow into buybacks, and the identities and token amounts involved in the seed-investor buyout, none of which have been disclosed. How markets interpret the removal of VC overhang against the still-pending governance decision is the next point to watch.