Ethena Foundation Proposes Using 95% of Protocol Revenue for ENA Buybacks
The Ethena Foundation has proposed allocating 95% of net protocol revenue toward buying back ENA tokens once the supply of USDe reaches $7.5 billion, according to information shared in a recent X post.
The proposal would establish a potential link between the growth of Ethena’s USDe supply and the use of protocol revenue for ENA token buybacks. If implemented, the plan would direct a substantial portion of the protocol’s net revenue toward purchases of its native ENA token after the specified USDe supply threshold is reached.
The information available does not indicate that the proposal has been approved or implemented. Details regarding the timing, execution mechanism and governance process for the proposed buybacks were also not provided.
Ethena Links USDe Growth to Proposed ENA Buybacks
Ethena is a decentralized finance protocol centered on USDe, a crypto-native synthetic dollar designed to maintain a stable value through a combination of digital assets and hedging strategies.
Under the proposal, the key trigger for the buyback strategy would be USDe supply reaching $7.5 billion. Once that threshold is achieved, 95% of net protocol revenue would be allocated to purchasing ENA.
The proposal therefore ties the potential deployment of protocol revenue to the scale of USDe within the ecosystem. USDe supply is a measure of the amount of the synthetic dollar in circulation and can be used as an indicator of the size of the protocol's operations.
The announcement does not state how quickly USDe could reach the proposed threshold or whether the $7.5 billion level is currently close to being achieved.
How the Proposed Revenue Allocation Could Work
A token buyback involves using funds to purchase a project's own tokens from the market. In this case, the Ethena Foundation has proposed directing 95% of net protocol revenue toward acquiring ENA once the specified condition is met.
The remaining portion of net protocol revenue is not addressed in the information provided. Likewise, the proposal does not specify whether the purchased ENA would be held, removed from circulation or used for another purpose.
Those details can be important when evaluating the potential effect of a buyback program. The proposal as described establishes the percentage of revenue and the USDe supply threshold, but does not provide further operational terms.
Because the proposal concerns the use of protocol revenue, its implementation would also depend on the applicable governance and approval process. The original information does not state whether token holders or another governing body must approve the measure.
ENA’s Role in the Ethena Ecosystem
ENA is the native token associated with the Ethena ecosystem. Token holders can participate in governance-related processes, subject to the protocol's applicable rules.
The proposed revenue allocation would create a direct connection between protocol activity and potential market purchases of ENA. However, the announcement itself does not make any prediction about ENA’s future price or establish that buybacks would result in a particular market outcome.
Revenue-based token buybacks have become a mechanism used by some blockchain projects to connect economic activity within a protocol with demand for its native token. Their impact can vary depending on revenue levels, market conditions and the amount of tokens purchased.
For Ethena, the proposal sets a specific benchmark: USDe supply must reach $7.5 billion before the proposed 95% allocation begins. Until that condition is met and the proposal receives any required approval, the buyback plan remains a proposal rather than an active revenue policy.
Further details on governance approval, implementation and the treatment of repurchased ENA would be required before the full implications of the plan can be assessed.
writer: Ethan Collins
Crypto Journalist
Ethan Collins reports on developments across the cryptocurrency and blockchain sector. His work covers market movements, protocol updates, regulatory changes, and emerging trends in digital assets.
He focuses on presenting complex topics in a clear and accessible manner for a broad readership.
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