A Big Surprise in an Altcoin: They Bought Back All the Tokens Sold by Major Investors Over the Past 9 Months

The Ethena Foundation announced four major updates that could significantly alter the token economy and governance structure of the Ethena ecosystem. These steps include repurchasing locked tokens from some large early-stage investors who sold ENA over the past nine months, implementing a “fee switch” mechanism that will use protocol revenue for ENA buybacks, and mitigating potential selling pressure stemming from future VC token unlocks.

According to the foundation’s statement, the Ethena Foundation has purchased all locked tokens held by certain large group investors who have conducted ENA sales of any amount over the past nine months. This move aims to eliminate potential selling pressure that could arise from future token releases by these investors.

Another significant development in the Ethena ecosystem was the Master Framework Agreement signed between the Ethena Foundation and Ethena Labs. Under this agreement, ownership of the intellectual property rights and the economic value generated by the protocol is transferred entirely to the Ethena Foundation.

In the new structure, this value will be managed by ENA token holders. It has been stated that Ethereum Labs’ shareholders will not have any perpetual rights over the cash flows generated by the protocol. Thus, the aim is to more directly link the economic value of the protocol to token holders rather than company shareholders.

The Ethena Foundation also announced that the governance proposal for the long-awaited “fee switch” mechanism has been opened to voting.

If the proposal is accepted, net revenues from all business lines operating under the Ethena brand will be used to programmatically purchase ENA tokens. Thus, the protocol’s revenues are planned to be directly channeled into ENA buybacks from the market.

This mechanism stands out as a significant change that could ensure the revenue generated as the Ethena ecosystem grows is channeled back into the ENA token economy.

The Ethena Foundation and the project’s leading investors have also agreed on a new structure to mitigate future selling pressure that could be created by monthly VC token unlocks.

Accordingly, the aim is to eliminate supply pressure that may arise from regular VC lock-ups by releasing unearned tokens belonging to investors.

*This is not investment advice.

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