TITLE: Ethena Proposes Revenue-Funded Buyback Mechanism for ENA Token Following Price Surge
The Ethena Foundation has submitted a formal proposal to the community regarding a significant shift in its token economics strategy, aiming to utilize net protocol revenue directly for buying back ENA tokens. This move follows an earlier announcement where the foundation indicated intentions to purchase supply currently held by prominent early investors. According to Cointelegraph reports from Friday, this initiative was met with strong market reaction as the native ENA token price appreciated approximately 10% in anticipation of the governance vote.
The core mechanism under discussion involves a strategic fee switch designed to channel ninety-five percent of all net revenue generated by the protocol toward these buyback operations. Under this framework, proceeds would be used exclusively for repurchasing tokens from major holders rather than general treasury expenditures or liquidity provision adjustments. By redirecting such a substantial portion of income back into circulation reduction through open market purchases, Ethena seeks to alter its supply dynamics and potentially support long-term token value.
This proposal represents a departure from standard revenue allocation models often seen in decentralized finance projects, where fees typically fund development or operational costs. The shift implies that the protocol prioritizes direct capital return mechanisms for existing stakeholders over alternative investment strategies. Community members will soon cast votes on whether to adopt this specific fee switch configuration. Successful implementation would effectively bind future earnings directly to token repurchase activity, creating a self-reinforcing cycle of demand driven by inherent revenue streams.
