The Ethena Foundation has announced four ecosystem updates that analysts have billed as extremely bullish and long overdue.
First of all, the Foundation said it has bought all the locked tokens from some major seed investors that had sold $ENA in the last nine months. Additionally, monthly VC overhang has ended, scrapping off one major bearish factor for $ENA in the past.
However, team tokens will remain locked as per earlier plans.
The Ethena Foundation and lead investors have agreed to eliminate future overhang associated with monthly VC investor unlocks by releasing unvested tokens.
In 2024, Ethena raised over $180M by selling 315 million $ENA tokens. This came back as persistent VC overhang until the latest update.
Thirdly, $ENA will now be aligned with the ecosystem, with brand and intellectual property (IP) rights assigned to the Foundation and governed by token holders. There will be no payouts to private investors in Ethena Labs (the entity responsible for building the ecosystem products).
Here, it’s worth noting that the battle over IP ownership and revenue is what triggered the historic Aave governance spat. However, Ethena has taken the opposite route to avoid an Aave-like divisive civil war.
Finally, the project has announced a fee switch and an $ENA buyback proposal using generated revenue. Currently, Ethena’s $USDe (yield-generating stablecoin) has a market supply of $4.5B. It has generated only $1.8M in 2026.
If the $USDe supply crosses $7.5B and annualized revenue hits $450M, 5% ($22M) of the proceeds will go to $ENA buybacks. The buyback program would increase if ecosystem growth explodes.
Ethena’s plans get 100% support
Interestingly, the community has overwhelmingly supported the new plans too. The floated proposal, whose voting is set to end by 2nd September, had 100% voting in favor of it.
In fact, there were no ‘abstain’ or ‘against’ votes as of press time, making it unanimous support.
A similar position has been echoed across social media. Reacting to the update, Ethena founder Guy Young said,
Long overdue. Make tokens great again.
For his part, Sam Ruskin, an Investment Associate at crypto VC Reciprocal Ventures, projected $ENA’s explosive rally and billed the update as a catalyst.
Rerate $ENA much higher. Ethena’s business model has shifted quite a lot in the last year. Bullish on Ethena winning the collateral layer.
Ethena mainly offers white-label stablecoins and $USDe savings. However, it further diversified its collateral beyond crypto to traditional liquid loans to avoid low yields due to bear markets. It has also scaled expansion for $USDe, with Coinbase being the latest distribution partner.
On Thursday, $ENA’s price rallied by 15% on the back of bullish updates. It extended the rally by 12% to a yearly high of $0.189, before easing slightly at press time. It remains to be seen how the revenue dynamics will drive buybacks and the token’s price higher in the future.
Final Summary
- Ethena announced an $ENA buyback proposal and an end to VC supply overhang.
- Its fee switch and $ENA buyback plan have received 100% community support so far.