The Ethena Foundation announced four important updates that could significantly change the token economics and governance structure of the Ethena ecosystem. These measures include the buyback of locked tokens from certain early-stage major investors who have sold $ENA over the past nine months, the implementation of a "fee switch" mechanism that will use protocol revenues to buy back $ENA, and mitigation of potential seller pressure related to future token unlocks by venture investors.
According to the foundation's statement, the Ethena Foundation has bought back all locked tokens belonging to large investors who have sold any amount of $ENA tokens over the last nine months. This step aims to eliminate potential seller pressure that could arise from future token unlocks by these investors.
Another major development in the Ethena ecosystem was the signing of a General Framework Agreement between the Ethena Foundation and Ethena Labs. Under this agreement, the intellectual property rights and economic value generated by the protocol are fully transferred to the Ethena Foundation.
In the new structure, this value will be managed by $ENA token holders. It was stated that Ethereum Labs shareholders will have no perpetual rights to the cash flows generated by the protocol. Thus, the goal is to more directly link the economic value of the protocol to token holders, rather than to company shareholders.
The Ethena Foundation also announced the start of voting on a proposal for the governance process of the long-awaited "fee switch" mechanism.
If the proposal is approved, net revenue from all business activities operating under the Ethena brand will be directed towards programmatic purchases of $ENA tokens. Thus, protocol revenues are planned to be directly used to buy back $ENA tokens on the market.
This mechanism stands out as a significant change that could ensure that revenues generated as the Ethena ecosystem grows are channeled back into the $ENA token economy.
The Ethereum Foundation and the project's lead investors have also agreed on a new structure designed to mitigate potential seller pressure that may result from the monthly VC token unlock.
Thus, the aim is to eliminate the supply pressure that could arise from regular venture capital token unlocks by releasing the unvested tokens owned by investors.
*This is not investment advice.
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