ENA Surge Explained: Ethena Foundation Dismantles VC Selling Pressure, Ushering in a New Era of Revenue Buybacks

Original author: Mahe, Foresight News

On August 28, according to Bitget market data, ENA surged to $0.189 — just 10 days earlier, the token was still trading sideways around $0.08. If you have held ENA over the past two years, you are most likely sitting on losses. From its all-time high of $1.52 in April 2024, the token has fallen over 90% at its worst. There were several rebounds along the way, but each time, relentless unlock-driven selling pressure knocked the price back to square one — until mid-August this year.

A broader market recovery is certainly one important factor, but the latest announcement is what truly triggered the sharp rally. On August 27, the Ethena Foundation released what could be described as a "self-revolutionary" announcement, prompting the market to reprice the token.

The Foundation Dismantles the VC Unlock "Time Bomb" Itself

The biggest bearish narrative for ENA over the past two years has been the endless token unlocks. Seed round investors, Series A investors, team, and advisors — every month, a batch of tokens is released from lockup and dumped into the market. This selling pressure is structural: no matter how strong your fundamentals are, someone is selling at any cost every single month.

The Ethena Foundation directly dismantled this bomb.

The official announcement includes two surgical operations targeting the supply side:

Buy back locked tokens from seed round investors. The Foundation has completed the acquisition of all locked ENA tokens held by certain major seed round investors who have sold ENA over the past 9 months. This means the unvested tokens held by these early investors have been bought back by the Foundation in one go and will no longer flow into the secondary market.

Cancel all future monthly VC unlocks. The Foundation has reached an agreement with major investors to eliminate the selling pressure from monthly VC unlocks by releasing tokens that have not yet vested. According to supplementary reports from English-language media, the remaining original investors' unlocks will be accelerated to complete by October 5, 2026, after which no investor tokens will remain in lockup.

The only tokens left untouched are team tokens — they will remain locked according to the original vesting schedule.

With these two moves, ENA's worst supply-side nightmare is essentially over. The market no longer needs to trade around the unlock calendar every month.

Protocol Revenue Finally Tied to ENA

In the DeFi space, there is an existential question: can your governance token actually capture protocol value? Until now, ENA's position was awkward. USDe is the third-largest stablecoin, and the Ethena protocol generates tens of millions of dollars in fees every month — yet ENA holders enjoy almost no economic returns beyond voting rights.

Now, this deadlock has been broken.

The Ethena Foundation has launched a governance proposal centered on one thing: using 95% of the protocol's net revenue to programmatically buy back ENA from the secondary market.

Additionally, the team has designed a clear trigger mechanism: when USDe's circulating supply reaches $7.5 billion, the buyback officially begins; as USDe supply crosses milestones like $10 billion and $15 billion, the buyback ratio will scale up in tiers.

In other words, the faster USDe grows, the stronger the buying pressure on ENA. This creates a clear positive flywheel: USDe expansion → increased protocol revenue → accelerated ENA buybacks → rising token price → greater market attention → further USDe expansion.

It is worth noting that this "fee switch" idea has been in the works for a long time. As early as November 2024, the community began discussing it; in September 2025, the Foundation announced that the activation conditions had been met (USDe supply exceeding $6 billion, cumulative revenue exceeding $250 million), but the actual vote and implementation were delayed until now.

Ethena has bought back tokens before. In the second half of 2025, a buyback program called DAT (Decentralized Autonomous Trust) deployed approximately $890 million in total, executed in two phases. But that was a one-off operation using reserve funds. This proposal, by contrast, turns buybacks into a permanent mechanism tied to protocol revenue.

Severing the Equity Holders' "Bloodsucking" Channel

Many DeFi projects have a hidden ailment: the interests of equity investors in the development company and token holders are not aligned. The company makes money and equity holders receive dividends; whether the token appreciates depends on the company's whim. Ethena faced this same problem — Ethena Labs is a traditional company with an equity structure, while ENA is an ecosystem token, and the two values were not fully aligned. The Foundation has now directly plugged this loophole.

The Ethena Foundation has reached a master framework agreement with Ethena Labs. The agreement stipulates that the intellectual property and value generated by the protocol will belong exclusively to the Foundation, governed by ENA holders; equity investors of the Labs entity will no longer have claims on residual cash flows.

This means Ethena Labs' equity investors have been effectively "shown the door" — they can no longer take a share of the protocol's economic output. Going forward, all value generated by every business line under the Ethena brand will flow to the Foundation, and ENA holders will allocate it through governance.

Coinbase Ventures Positioned Early, Hayes Calls for 5x Upside

This last piece of the puzzle has nothing to do with technicals or fundamentals — it's about human nature. ENA has fallen too hard. From its April 2024 high of $1.52, it dropped to an all-time low of $0.0699 in June this year. But extreme declines often breed extreme reversals. For a protocol generating substantial annual revenue, this valuation had entered the "bargain hunting" zone.

In June 2026, Coinbase Ventures publicly announced it had purchased ENA on the secondary market and partnered with Ethena to develop on-chain financial products.

On August 6, Arthur Hayes bought 10.9 million ENA, bringing his total holdings to 22.64 million tokens (worth approximately $4 million). He stated that if increased dollar liquidity drives BTC higher, a recovery in Bitcoin basis yields could attract capital back into USDe, and suggested ENA has the potential to achieve a 5x gain in the coming months. On August 25, the BitMEX founder once again talked up ENA: "OTCs are starting to call us asking to borrow dollars. Rates are still too low, but that's a good signal that basis trades are coming back. ENA will benefit from this — huge upside."

Of course, the risk side must also be acknowledged. USDe's supply has shrunk from approximately $15 billion at its peak in October 2025 to around $4 billion today. The premise of revenue-based buybacks is that the protocol maintains sustained income, and the decline in USDe supply suggests underlying revenue is under pressure. If USDe fails to regain growth, the so-called revenue buybacks could turn out to be castles in the air.