Ethena Foundation Dangles Buyback Carrot: Will $7.5 Billion in USDe Circulation Trigger Token Support
The Ethena Foundation has proposed an automated buyback mechanism for ENA tokens, contingent on USDe's circulating supply reaching $7.5 billion. This would trigger a 'fee switch' that allocates 95% of net revenue from Ethena's operations to ENA purchases on the open market.
The proposal is part of a larger restructuring effort aimed at addressing pressure points that have weighed on ENA's price trajectory. The Foundation has also agreed to buy out locked ENA positions from seed investors who hold allocations greater than 0.25% of total supply, and consolidate remaining investor token unlocks into a single event in October 2026.
Markets responded positively to the news, with ENA surging 16-23% intraday to around $0.17. The token has climbed more than 70% over the preceding week. However, there is a trade-off baked into this structure: routing 95% of net revenue toward ENA buybacks would reduce USDe distributions, which have been one of the protocol's primary draws for stablecoin holders.
The entire mechanism depends on Ethena's revenue, which itself relies on the basis trade that underpins USDe's yield. A scenario where funding rates collapse could produce buybacks too small to meaningfully support ENA's price.