Ethena Ecosystem Update

Content featured below has been provided by the Ethena Foundation

The Ethena Foundation is aware of two material areas of doubt and concerns related to Ethena since launch: early investor monthly unlock overhang, and where the value created by the protocol ultimately accrues.

Today both of these points are being directly addressed with four updates:

1. The Ethena Foundation executed a buyout of locked tokens from certain major seed investors that sold any ENA within the last 9 months.

2. The Ethena Foundation and lead investors have agreed to eliminate future overhang associated with monthly VC investor unlocks by releasing unvested tokens. All team tokens remain locked per the original vesting schedules.

3. The Ethena Foundation and Ethena Labs have reached agreement in principle on a Master Framework Agreement, whereby IP and ownership of value accrued by the protocol would be assigned to the Foundation exclusively, not to equity holders of Labs.

4. Proposal for the implementation of the fee switch whereby 95% net revenue accrued across all business lines under the Ethena brand will be used to programmatically buy back the ENA token.

The vote for implementation is now live:

Snapshot

Further details on each item are outlined below:

1. Investor Buyout

The Ethena Foundation has acquired all of the locked tokens in OTC transactions over the last two weeks from certain investors who were originally allocated >0.25% of the total token supply.

The above investor group was split into two portions:

i) Investors who sold even a single token following the market cycle peak on 10th October 2025.

ii) Investors who did not sell a single token following the peak on 10th October 2025.

An offer was made to all investors in group ii) to repurchase their tokens at par with no discount. Not a single investor agreed.

The foundation purchased all unvested tokens from the investors in group i), other than 0x6e0a1dDAD894e6466d405Bb73377F0A257278D74, which declined to sell given its continued conviction in Ethena.

The wallets related to the investors from whom the tokens were acquired are set out here:

As a result, the investors who have been selling into the market during the relevant time frame now hold no unvested ENA which could be sold into the market in the future.

2. Tokenomics following the transaction

All numbers to be updated

As noted above, effective 5 October 2026, all remaining original investor unlocks have been accelerated such that no investor tokens are subject to lockup; the market for ENA should no longer be impacted by monthly investor unlocks.

Team tokens remain fully subject to their original lockup and vesting schedules, preserving long-term alignment between the team and the ecosystem it contributes to. For absolute clarity the ~12% of locked unvested tokens post-transaction relate only to team, ecosystem and foundation holdings, aligned with the long term success of the protocol.

StablecoinX is one of the top two largest holders of ENA at approximately 20% of total supply, held subject to the lockup schedule specified in the Token Purchase Agreement filed publicly as part of StablecoinX’s SEC disclosures.

3. Aligning Token & Equity: The Master Framework Agreement

One of the more existential questions in crypto over the past year, and since the inception of governance tokens, has been where the value a protocol generates accrues to: the ecosystem, the founders and investors, or the token.

For most of the last decade, the answer has largely been driven by exogenous factors like regulatory uncertainty and enforcement actions; tokenholders have generally had to accept an answer from the ecosystem stewards based on trust.

Ethena Labs and the Ethena Foundation are pleased to announce agreement in principle on the terms of a Master Framework Agreement to address existing uncertainty. Under the Master Framework we crystalize:

• Substantially all material Ethena Protocol intellectual property would be assigned or exclusively licensed to the Ethena Foundation and its ecosystem, not the equity holders of Ethena Labs.
• Economic upside, any potential future sale of the underlying business, residual profit and entrepreneurial benefit associated with the Ethena Protocol accrues to the Ethena Foundation and its ecosystem, not the equity of the labs entity.
• The equity holders of Ethena Labs are due no residual cash flow or profit from the protocol.

The above reflects the arrangements that have existed since the inception of the Ethena Foundation, but are now crystalized publicly in this framework.

To be clear, equity holders of Ethena Labs have never received the benefit of a single dollar of protocol revenues via distributions, dividends or otherwise; all protocol revenue has gone to the benefit of the Ethena Foundation and the Ethena ecosystem.

The Master Framework Agreement is expected to be published in October 2026.

4. Fee Switch Parameter Expansion

The governance vote below would implement the Fee Switch parameters approved and published by the Ethena Risk Committee:

Snapshot

Under the proposed schedule, the share of protocol revenue directed to ENA buybacks increases at each USDe circulating supply milestone, and is set intentionally to support aggressive growth back to the heights of 2025 at ~$15b of USDe supply. This is reflected in the “growth mode” categorization in the table below.

This balances the need to continue capturing the market opportunity we see ahead by growing USDe to >$100b in the next 5 years with value accrual to the broader ecosystem.

Illustrative ENA buybacks scale with USDe supply

These figures above are illustrative. They hold protocol APY constant at 6.0% which is below the realised gross protocol APY for Ethena since inception. In order to isolate the effect of the supply milestones, and actual amounts will vary with realised rewards and the composition of the USDe backing.

Ethena currently has 3 core business lines:

i) Ethena USDe savings

ii) Ethena Whitelabel stablecoins

iii) Ethena [X] - launching next week

Once the first milestone laid out above is hit, 95% of the net revenue from each of these business lines - which is paid to the Ethena Foundation - would be directed to the buybacks with the remaining 5% to fund growth.

These accumulated buybacks will be tracked in our transparency dashboard here: https://app.ethena.fi/dashboards/transparency

The buyback rate schedule, the milestone thresholds and the buyback mechanics have all been signed off by the Risk Committee and are now live for vote and implementation.

Token Transparency Framework

Building further on improving transparency for Ethena ecosystem stakeholders, Ethena is pleased to announce its participation in the Blockworks Token Transparency Framework, the open-source disclosure standard now backed by a coalition of exchanges, custodians, market makers and asset managers, and adopted by more than 40 protocols to date. The standard covers entity structure, supply and vesting schedules, insider allocations, foundation agreements and protocol value retention.

Ethena’s completed submission is available here: 

https://blockworks.com/token-transparency/filing/ethena

Where this leaves things

The investor unlock schedule is finished. Sellers from the last 9 months have been bought out by the Foundation. The economics of the protocol are moving into a public agreement under which the value Ethena creates belongs to the Ethena ecosystem and token holders, not the equity of the Ethena Labs entity. And finally the fee switch implementation live today will crystalize the revenue and value to the token. 

Disclaimer

The above is for information only and should not be construed as an offer to sell or a solicitation of an offer to buy any token, security, or other financial instrument in any jurisdiction. It is not investment, legal, tax or accounting advice. Nothing in it should be relied on as a recommendation to acquire, hold or dispose of ENA or any other asset.

The information in this update is given as at August 27, 2026, and except where required by law no obligation is undertaken to update it. Figures describing protocol revenue, buyback volumes and USDe supply are purely illustrative, rest on the assumptions stated alongside them, and are not forecasts, projections, or guarantees. Outcomes may differ materially from those described.

Governance proposals are subject to the Ethena Foundation’s constitutional documents and to the powers and duties of its directors; the outcome of any vote is not a commitment by the Ethena Foundation or any other person to implement any particular parameter unless determined to be in accordance with applicable law and the objects of the Ethena Foundation.

This update is not directed at, and must not be relied on by, any person in any jurisdiction where its publication, availability, or use may be contrary to local law or regulation, including the United Kingdom. It is not available to, and must not be forwarded to, any person located in or ordinarily resident in a jurisdiction subject to comprehensive sanctions, or any person who is the target of sanctions administered by OFAC / OFSI / EU / other, as applicable.