ENA jumps over 20% as Ethena pushes to end investor unlock overhang

• ENA is up 27% after the Ethena Foundation announced measures to address investor unlock overhang and clarify how the protocol's value accrues.
• The Foundation bought back locked ENA tokens from major seed investors who sold portions following the October 10 market-wide liquidations.
• Ethena proposed directing 95% of net revenue toward ENA buybacks once USDe reaches the first specified supply milestone.

The Ethena (ENA) Foundation has announced a series of measures to address two long-standing concerns about its ecosystem, including selling pressure from early investors and uncertainty over how the protocol's economic value is distributed.

Ethena moves to address investor unlock concerns

In a blog post on Thursday, the Foundation noted that it bought back locked ENA tokens from certain major seed investors and accelerated the remaining investor unlock schedule.

Ethena said it acquired locked tokens through over-the-counter (OTC) transactions over the last two weeks from investors who were originally allocated more than 0.25% of ENA's total supply.

The affected investors were divided into two groups, including those who sold at least one ENA token after the market cycle peak on October 10 and those who did not sell any tokens during that period.

According to Ethena, investors in the second group were offered the opportunity to sell their tokens back to the Foundation at no discount, but none accepted. It subsequently purchased all unvested tokens from investors in the first group, except for one wallet that declined to sell.

"The market for ENA should no longer be impacted by monthly investor unlocks," the Foundation wrote.

Team tokens will remain subject to their original lockup and vesting schedules. Ethena shared that approximately 12% of locked and unvested tokens following the transaction relate only to team, ecosystem and Foundation holdings.

Adding to the token buybacks, the Foundation and Ethena Labs reached a Master Framework Agreement under which substantially all material intellectual property associated with the Ethena Protocol would be exclusively licensed to the Ethena Foundation and its ecosystem.

Under the proposed framework, economic upside, residual profit and potential proceeds from any future sale of the underlying business would accrue to the Foundation and ecosystem rather than Ethena Labs' equity holders.

"The equity holders of Ethena Labs are due no residual cash flow or profit from the protocol," Ethena said.

Ethena proposes revenue-funded ENA buybacks

Ethena also said it released a governance proposal to activate and expand parameters for its ENA fee switch, with the implementation vote now live.

The proposal, developed in collaboration with the Ethena Risk Committee, would establish supply-based milestones that determine how much protocol revenue is allocated to ENA buybacks. The share directed toward buybacks would increase as USDe's circulating supply reaches successive milestones.

Ethena stated that the structure is designed to balance continued growth with value accrual to the broader ecosystem as the protocol pursues its goal of expanding USDe supply beyond $100 billion over the next five years.

“This balances the need to continue capturing the market opportunity we see ahead by growing USDe to more than $100 billion in the next five years with value accrual to the broader ecosystem,” the Foundation shared.

Once the first proposed supply milestone is reached, 95% of net revenue from Ethena's three core business lines would be directed toward ENA buybacks. The remaining 5% would be targeted at funding growth.

ENA is trading at $0.186, up 27% in the past 24 hours at the time of writing.