ENA’S BUYBACK HAS A CATCH
Ethena’s new fee switch sounds impressive: once USDe reaches $7.5B, 95% of the net revenue paid to the Foundation would go toward buying $ENA from the market. But there’s a detail that makes this less straightforward than the headline suggests.
USDe is currently around $4B, meaning Ethena still needs a substantial increase in supply before the buyback mechanism even starts. And according to Ethena’s own modelling, the first active tier would produce around $52.7M in annualized buybacks under its assumptions.
That sounds meaningful until you compare it with ENA’s supply situation. Ethena is also changing its investor unlock schedule, with remaining investor tokens being released on October 5 instead of continuing through monthly unlocks. So the market is getting a buyback story on one side and a large unlock event on the other.
That’s what makes ENA interesting to me right now. The buyback headline is real, but it only becomes meaningful if USDe gets big enough to activate it — and then generates enough revenue to offset the supply coming into the market.
Ethena’s new fee switch sounds impressive: once USDe reaches $7.5B, 95% of the net revenue paid to the Foundation would go toward buying $ENA from the market. But there’s a detail that makes this less straightforward than the headline suggests.
USDe is currently around $4B, meaning Ethena still needs a substantial increase in supply before the buyback mechanism even starts. And according to Ethena’s own modelling, the first active tier would produce around $52.7M in annualized buybacks under its assumptions.
That sounds meaningful until you compare it with ENA’s supply situation. Ethena is also changing its investor unlock schedule, with remaining investor tokens being released on October 5 instead of continuing through monthly unlocks. So the market is getting a buyback story on one side and a large unlock event on the other.
That’s what makes ENA interesting to me right now. The buyback headline is real, but it only becomes meaningful if USDe gets big enough to activate it — and then generates enough revenue to offset the supply coming into the market.
