Ethena Pushes for ENA Buyback Using 95% of Net Revenue — Will It Change the DeFi Landscape?

An intriguing proposal has shaken up the DeFi market. Ethena, the issuer of the dollar-pegged asset USDe, has announced plans to use a staggering 95% of the platform's net revenue to buy back its native token, ENA. We are breaking down the details of this proposal—which has already sent ENA prices jumping 10%—and what its impact on the DeFi market might be.

95% Net Revenue Buyback: Ethena's Bold Move

According to Cointelegraph, Ethena has launched a governance proposal to utilize 95% of protocol net revenue to buy ENA tokens directly from the market. This is a complete departure from the inflationary models used by many DeFi protocols, which simply issue new tokens to distribute as interest.

Let’s use a stock market analogy: it works exactly like a corporate stock buyback, where a company uses its profits to purchase its own shares from the open market. Just as reducing the number of shares in circulation increases the value of each one, Ethena’s strategy is to reduce the circulating supply of its token using actual revenue to boost its value.

This signals strong confidence in rewarding token holders with real performance instead of relying on the old structure of printing infinite utility tokens to pay artificial interest.

A Shift in DeFi Trends: From Simple Interest to Real Revenue

This proposal is not just a short-term pump event; it is a strong signal that the fundamental landscape of the DeFi market is changing.

Historically, mainstream DeFi involved complex cross-chain bridging for high-risk yield farming, which was always exposed to hacking or security risks. Ethena’s approach is different. Instead of complex, risky virtual structures, they are prioritizing a 'real revenue' model that drives token value based on actual protocol earnings.

We are entering an era where DeFi assets are being evaluated by actual business performance and revenue metrics rather than abstract high-interest rates. This is why market experts are calling this buyback proposal a critical inflection point where DeFi matures to resemble the traditional corporate stock model.

Early Investor Liquidity and Remaining Challenges

Another reason this proposal is grabbing attention is how it handles early investor liquidity. Ethena has proposed adjusting the lock-up release schedule for investors while simultaneously offering a plan for the protocol to buy back a portion of their holdings.

Typically, when large amounts of early investor tokens are unlocked, a flood of selling pressure causes prices to crash. By having the protocol absorb some of this supply, they are effectively mitigating that pressure. It serves as a smart safety net, offering investors a reasonable exit while reducing panic for regular holders.

However, there are clear challenges to overcome. The more a token adopts stock-like profit-sharing mechanisms, the more likely it is to end up on the radar of global financial regulators. In particular, the risk of being labeled a security by authorities, including those in the U.S., remains, so whether this experiment can safely navigate the wall of regulation will be a key variable to watch.

Key Points to Watch

If this vote passes and the buyback begins, it could serve as a catalyst for other DeFi protocols to actively adopt 'real profit-sharing' models. It is worth watching whether Ethena’s experiment can weather the regulatory risks and become the new standard for the DeFi ecosystem. Stay tuned to the voting results and follow the performance of real revenue against the circulating supply of their core asset, USDe!

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