Ethena has proposed directing 95% of net revenue from its branded businesses toward ENA buybacks once USDe supply reaches $7.5 billion, significantly increasing the protocol's token repurchase program.
Ethena Proposes 95% Revenue Allocation
The proposal would direct 95% of net revenue from Ethena's branded businesses toward ENA token buybacks once the USDe synthetic dollar supply reaches $7.5 billion. The increased allocation represents a major expansion of the protocol's existing buyback program, which currently sets aside approximately $5 million per day to repurchase ENA tokens from the market. The proposal aims to strengthen the ENA token's value proposition by channeling more protocol revenue directly into token repurchases.
Ethena's revenue model has generated significant returns for the protocol, with cumulative fees reaching $972 million and cumulative revenue of $332 million. The protocol generates approximately $178 million in annualized fees from its USDe synthetic dollar and associated yield-bearing products. This revenue buyback approach mirrors strategies used by other DeFi protocols, including the Hyperliquid's AQAv2 activation for HYPE buybacks.
USDe Supply Growth Drives the Proposal
The proposal's trigger at $7.5 billion USDe supply reflects Ethena's continued growth as a leading synthetic dollar protocol. USDe has become one of the most widely used stablecoins in DeFi, with its yield-bearing mechanism attracting significant capital. The protocol's model involves minting USDe against Bitcoin and Ethereum collateral while generating yield through delta-neutral strategies that combine staking yields with funding rate arbitrage.
Ethena's expansion has also attracted institutional partnerships. BlackRock recently integrated Ethena's USDe into its Aladdin platform, connecting the synthetic dollar to one of the world's largest institutional asset management systems. This institutional integration parallels the growing whale activity in the ecosystem, as seen with the HYPE whale adding $24M to Hyperliquid.
ENA Token Performance and Market Response
ENA traded near $0.147 on Aug. 27, retaining a weekly gain of about 25% after its sharp breakout met resistance near $0.180. The token's price has formed a possible short-term base between $0.140 and $0.147. The proposed 95% revenue allocation could provide significant buy-side pressure for ENA if implemented, as it would redirect most of the protocol's revenue into market purchases.
The existing buyback fund already allocates approximately $260 million for ENA repurchases, setting aside about $5 million per day. The proposed increase to 95% of net revenue would substantially expand this allocation. Ethena's governance process will determine whether the proposal is adopted, with token holders voting on the implementation details and timeline.
