Ethena Foundation Cuts Token Supply in Ambitious Governance Overhaul

The Ethena Foundation has made significant changes to its governance tokenomics, buying out early investors and eliminating future venture capital token unlocks.

This move involves four key actions: executing buyouts of early-stage investors, formalizing agreements on token and equity rights, approving a revenue-driven buyback proposal, and removing the overhang of 3.75 billion tokens earmarked for investors under the original vesting schedule.

The maximum supply of ENA governance tokens is 15 billion, with 25% allocated to investors. By buying out these investors and canceling future unlocks, Ethena is significantly reducing the supply of tokens that can be used for governance and speculation.

The revenue buyback proposal channels protocol revenue toward purchasing ENA tokens on the open market, which could help stabilize the token price and reduce volatility.