Ethena Fee Switching Vote Ties ENA Buybacks to USDe Growth

Ethena has put its long-awaited fee change to online voting today, and contrary to past discussions about the need to “restart”, this push is accompanied by a tangible income scale. The proposal, presented in a broader framework ecosystem updatewould directly tie the size of ENA redemptions to the amount of USDe in circulation of the protocol.

What’s the scoop?

• The mechanism: The switch works in two layers. First, the share of Ethena’s protocol gross revenue flowing to the Foundation gradually increases as the supply of USDe increases: 5% once USDe exceeds $7.5 billion, 10% at $10 billion, 15% at $15 billion, and higher from there, per Blockworks Advisory Breakdown. Second, 95% of everything the Foundation raises would go directly to ENA buyouts, with the rest funding growth.
• The backtest: Design review for The Ethena Governance ForumConcrete blocks found the trigger has reportedly only been active 118 of the last 705 days, buying ENA at an annualized rate of about $52.7 million each time it was online. In the 93 days that sUSDe has already outperformed Sky’s sUSDS yield, it has remained in the lead after the buyback reduction on 82 of them. The other 11 fell behind by less than a tenth of a percentage point.
• Also announced: The tariff change occurred alongside a clean-up of the ENA’s other large surplus. The Foundation has spent the past two weeks buying out early investors who had sold into the market since October, and Labs has agreed in principle to entrust the intellectual property and economic benefits of the protocol to the Foundation rather than its own shareholders. Ethena also filed an application with the Blockworks Token Transparency Frameworkjoining +40 other protocols in the disclosure standard.