Ethena Foundation Announces Token Buyout, Governance Changes

The Ethena Foundation has announced four major changes affecting the ownership, governance and token economics of the Ethena ecosystem, including a buyout of locked ENA tokens held by certain seed investors who sold ENA during the past nine months.

The announcements, shared in an update highlighted by @WuBlockchain, also include an agreement between the Ethena Foundation and Ethena Labs covering protocol intellectual property and value ownership, a governance proposal to activate a fee switch for ENA buybacks, and changes intended to address future monthly token unlocks for venture capital investors.

Ethena Foundation Completes Buyout of Locked Tokens

Under the first initiative, the Ethena Foundation said it had executed a buyout of all locked tokens held by certain major seed investors that sold any ENA during the last nine months.

The announcement did not provide a specific figure for the number of tokens involved. The move addresses locked allocations belonging to investors who had previously sold ENA while still holding tokens subject to vesting or lockup arrangements.

The Foundation presented the transaction as part of a broader set of changes to the structure surrounding ENA ownership and the future distribution of value generated by the protocol.

Ethena Labs and Foundation Establish Master Framework Agreement

The second development involves a Master Framework Agreement reached between the Ethena Foundation and Ethena Labs.

Under the agreement, intellectual property and ownership of value accrued by the protocol are assigned exclusively to the Foundation. markets Governance of those assets will be carried out by token holders, according to the announcement.

The framework also specifies that there will be no residual cash flow owed to equity investors in the Ethena Labs entity.

The arrangement establishes a distinction between the protocol and the corporate entity responsible for developing or supporting it, with the Foundation positioned as the exclusive holder of protocol-related intellectual property and accrued value.

Governance Proposal Targets ENA Fee Switch

A separate governance proposal has also been introduced to implement a fee switch for the Ethena ecosystem.

If implemented, net revenue generated across all business lines operating under the Ethena brand would be used programmatically to buy back ENA tokens. The proposal is now live and remains subject to the project's governance process.

A fee switch generally refers to a mechanism that directs revenue generated by a protocol toward token holders or token-related activities. In this case, the proposed structure would allocate the specified net revenue toward automated purchases of ENA.

The announcement did not state the outcome of the governance vote or provide a specific timeline for implementation.

Future VC Unlocks to Be Eliminated

The fourth change concerns the future supply of ENA associated with venture capital investors.

The Ethena Foundation and lead investors have agreed to eliminate future overhang associated with monthly VC investor unlocks by releasing unvested tokens. The announcement described the measure as a way of removing the future unlock structure associated with those investor allocations.

Team tokens, however, will remain locked under the original vesting schedules.

The distinction means the announced changes affect investor-related unlocks while leaving the previously established team vesting arrangements unchanged.

Taken together, the four initiatives financial represent changes to Ethena's token ownership structure, governance framework, protocol value rights and future token unlock arrangements. The proposed fee switch remains subject to governance, while the other measures announced by the Foundation relate to agreements and transactions involving the Foundation, Ethena Labs, seed investors and lead investors.

Writer: Victoria Hale
Technology & Blockchain Writer

Victoria Hale writes about blockchain technology, digital infrastructure, and the intersection of emerging technologies with finance. Her articles explore how new protocols and systems are shaping the evolving digital economy.

She prioritises clarity and accuracy when explaining technical developments to a general audience.