Ethena’s governance vote on activating its fee switch is live, with the proposal directing 95 percent of net protocol revenue toward programmatic ENA buybacks once the USDe stablecoin supply reaches its first milestone of $7.5 billion, according to CoinMarketCap and crypto.news coverage. The remaining 5 percent would fund growth. At the same time, Arthur Hayes bought 25.33 million ENA, a purchase flagged across market trackers as the token extends a rally that has roughly doubled its price in recent weeks.
The vote is the culmination of a tokenomics overhaul the Ethena Foundation announced in late August, targeting the two issues that have weighed on the token: persistent selling pressure from early investor unlocks, and uncertainty over how much of the protocol’s economic value actually flows to ENA holders rather than to the company behind it.
How the fee switch works
The proposal, developed with the Ethena Risk Committee, ties buybacks to supply milestones rather than switching them on immediately. Once USDe circulation hits $7.5 billion, 95 percent of net revenue from Ethena’s three core business lines goes to open-market ENA purchases. Those lines are USDe savings, Ethena’s white-label stablecoins for third parties, and a product called Ethena [X] that launched in September. The share directed to buybacks would step up as supply crosses successive thresholds, a structure designed to balance tokenholder value against continued growth.
The design matters because USDe supply has been on a round trip. The synthetic dollar, which generates yield partly from derivatives funding rates, peaked near $15 billion in October 2025 and fell below $5 billion as crypto markets cooled and funding rates compressed. The buyback mechanism only produces meaningful demand if the business underneath it grows back, so the milestone structure is as much a discipline device as a promise. It forces the protocol to earn its buybacks through real growth instead of switching on a subsidy while the product shrinks.
The unlock cleanup
The second half of the overhaul addressed supply overhang directly. The foundation bought back locked ENA from certain large seed investors through over-the-counter transactions, targeting investors originally allocated more than 0.25 percent of total supply, and divided them by whether they had sold since the October 2025 market peak. It also agreed with lead investors to release all remaining original investor tokens at once beginning October 5, ending the monthly unlock schedule that had produced steady, predictable sell pressure. Team tokens stay locked under their original vesting schedules.
After those changes, about 12 percent of ENA supply remains locked and unvested, consisting only of team, ecosystem and foundation holdings. StableCoinX, one of the two largest ENA holders with around 20 percent of supply, remains under a separate lockup schedule set out in its publicly filed token purchase agreement. The foundation and Ethena Labs also signed a Master Framework Agreement licensing the protocol’s intellectual property to the foundation, drawing a clearer line between tokenholders and Labs shareholders.
The market read the package as a genuine fix rather than window dressing: ENA jumped 23 percent on the announcement day in late August and has kept climbing since. The Hayes purchase adds a visible bullish datapoint, though it is one trader’s position, not a protocol metric, and Hayes has a long history of both early conviction and early exits in DeFi tokens.
What it means for the stablecoin race
Ethena is fighting for relevance in a stablecoin market that has consolidated fast. Circle’s USDC business just gained a regulatory tailwind with the OCC’s preliminary approval for Agora’s national trust bank, and rival issuers are racing into regulated wrappers under the GENIUS Act, the federal stablecoin law that took effect in July last year. Ethena’s answer has been to lean into yield and distribution: a $1 billion facility with FalconX that channels USDe backing into overcollateralized institutional loans, a savings product launched with Coinbase, and Janus Henderson exploring USDe distribution to traditional investors after investing in ENA in June.
The fee switch vote, if it passes and the milestones are eventually hit, would make ENA one of the few large DeFi tokens with a direct, rule-based claim on protocol revenue. That is the model that transformed buyback programs elsewhere in crypto from talking points into price drivers. The catch is the dependency chain: revenue depends on USDe supply, supply depends on yield, and yield depends on funding rates Ethena does not control. In a hot derivatives market the machine works; in a cold one it stalls, which is exactly what happened to USDe’s supply over the past year. The current rally in bitcoin and ether has funding rates positive again, which is why the timing of the vote is favorable.
Governance watchers will also be checking the vote’s fine print for how buybacks are executed, since programmatic open-market purchases by a foundation raise market-structure questions that regulators have started to examine more closely. A transparent, disclosed execution policy would strengthen the proposal’s credibility; a vague one would invite the criticism that the fee switch is a price-support mechanism wearing a governance hat.
Voting remains open, and the implementation details, including the exact buyback schedule and disclosure cadence, are expected to follow in a follow-up proposal if the measure passes as expected given current participation. The October 5 unlock date gives the timeline some urgency, since the first big test of the new supply structure arrives within two weeks of the vote.