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ENJ Surges Over 130% in 10 Days: VCs Stop Unlocking, 95% of Protocol Revenue Used for Buyback

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ENA's largest supply-side nightmare is basically over, and the market no longer has to trade based on the monthly unlock calendar.

Original Title: "The ENA Surge: Ethena Foundation's Four-Act Self-Rescue Drama"
Original Author: Mach, Foresight News

On August 28, according to the market data, ENA has skyrocketed to $0.189, while just 10 days ago, its price was hovering around $0.08. If you have been holding ENA for the past two years, you are most likely at a loss. Calculated from its all-time high of $1.52 in April 2024, the token has dropped by over 90%. There were a few rebounds in between, but each time the price was slammed back to square one by relentless unlocked selling pressure, until mid-August this year.

The overall market recovery is certainly one of the important reasons, but the latest announcement was the key to its significant surge. On August 27, the Ethena Foundation released an announcement that can be described as a "self-revolution," which then prompted the market reevaluation.

Foundation Takes Down the VC Unlock "Time Bomb" Themselves

The biggest bearish narrative about ENA in the past two years has been the endless token unlocks. Seed round, Series A, team, advisors—every month, a batch of tokens is released from lockups and dumped into the market. This selling pressure is structural—no matter how good your fundamentals are, there is someone selling every month without considering the cost.

The Ethena Foundation directly dismantled this time bomb.

The official announcement included two surgical operations on the supply side:

Repurchase of lockup tokens from seed round investors. The Foundation has completed the repurchase of all lockup ENA tokens from some major seed round investors who had sold ENA in the past 9 months. This means that the chips that these early investors have not yet unlocked were bought back in one go by the Foundation and will not flow into the secondary market.

Cancellation of all future monthly VC unlocks. The Foundation reached an agreement with major investors to eliminate the selling pressure from future monthly VC investor unlocks by releasing the tokens that are still unallocated. According to supplementary reports from English media, the remaining original investor unlocks will be accelerated starting from October 5, 2026, and there will be no further investor tokens in lockup status after that.

The only tokens not touched are the team tokens—they will continue to remain locked according to the original vesting schedule.

With these two moves, ENA's biggest supply-side nightmare has essentially ended, and the market no longer needs to trade based on the unlock calendar every month.

Protocol Revenue Finally to Be Pegged to ENA

In the DeFi field, there is a fundamental question: Can your governance token really capture protocol value? Until now, ENA has been in a rather awkward position. USDe is the third largest stablecoin, the Ethena protocol generates millions of dollars in fees every month, but ENA holders, apart from having voting rights, have little to no economic upside.

Today, this deadlock has been broken.

The Ethena Foundation has introduced a governance proposal centered around one key aspect: allocating 95% of the protocol's net income to secondary market automated ENA buybacks.

Furthermore, a clear trigger mechanism has been designed: the buyback will officially commence when the USDe circulating supply reaches $7.5 billion; as the USDe supply surpasses $10 billion, $15 billion, and other milestones, the buyback ratio will increase in steps.

In other words, the faster USDe grows, the stronger the ENA buy pressure. This creates a clear positive feedback loop: USDe expansion → protocol revenue increase → accelerated ENA buybacks → token price appreciation → heightened market attention → further USDe expansion.

It is worth noting that the concept of this "fee switch" has been brewing for a long time. As early as November 2024, the community began discussions; in September 2025, the Foundation announced that the activation criteria had been met (USDe supply over $6 billion, cumulative revenue over $250 million), but the actual voting and implementation have been delayed until now.

Previously, Ethena had conducted token buybacks. In the second half of 2025, a buyback plan named DAT (Decentralized Autonomous Trust) deployed approximately $890 million in two phases. However, that was a one-time operation using reserve funds, whereas this proposal turns buybacks into a permanent mechanism tied to protocol revenue.

Severing the "Vampire" Drain on Ownership

Many DeFi projects suffer from a hidden ailment: the interests of the development company's equity investors and token holders are not aligned. The company makes money, equity holders receive dividends; whether the token price rises depends on the company's mood. Ethena has also faced this issue in the past—Ethena Labs is a traditionally structured company with equity, while ENA is the ecosystem token, and the values of the two do not entirely match. The Foundation has directly addressed this loophole in the system.

The Ethena Foundation has reached a primary agreement with Ethena Labs. The agreement stipulates that the protocol's generated intellectual property and value ownership will be exclusive to the Foundation and governed by ENA holders; equity investors in Labs entity will no longer have claims to residual cash flows.

This means that Ethena Labs' equity investors have been "persuaded" — they can no longer have a share of the protocol's economic output. All future value generated by all business lines under the Ethena brand will flow to the foundation, to be distributed by ENA holders through governance.

Coinbase Venture Takes Early Position, Hayes Calls for 5x Price Surge

Finally, this secret has nothing to do with technicals or fundamentals; it is about human nature. ENA fell too hard. From a low of $1.52 in April 2024 to a historic low of $0.0699 in June this year. But extreme falls often breed extreme reversals. For a protocol with a hefty annual revenue, this valuation has entered the "bargain hunting" range.

In June 2026, Coinbase Ventures publicly announced their purchase of ENA on the secondary market and a partnership with Ethena to develop on-chain financial products.

On August 6, Arthur Hayes bought 10.9 million ENA, increasing his total holdings to 22.64 million coins (worth about $4 million). He stated that if a USD liquidity increase drives BTC higher, the return of Bitcoin's basis trade spread could re-attract funds to USDe, and he mentioned that ENA could see a 5x increase in the coming months. On August 25, BitMEX co-founder Arthur Hayes once again called for ENA: "OTC brokers are starting to contact us asking about borrowing USD. The interest rates are still too low at the moment, but this is a good sign that the basis trade is coming back. ENA will benefit from this, with huge upside potential."

Of course, we must also consider the risks. The supply of USDe has shrunk from about $15 billion in October 2025 to around $4 billion today. The premise of income buyback is that the protocol has steady revenue, and the declining USDe supply implies pressure on underlying revenue. If USDe cannot resume growth, the so-called income buyback may turn out to be a castle in the air.