Ethena Foundation buys out early investors in major ecosystem, token overhaul

The Ethena Foundation said on Thursday, August 27, it had bought out locked tokens from certain major seed investors that had sold down part of their holdings.

This is the first of four changes the foundation outlined for the synthetic-dollar protocol and its ENA governance token.

Buying back what early backers were dumping

The Foundation disclosed the buyout in a post on X, while it also shared a more detailed blog post.

On the first point, the Foundation stated that it “executed a buyout of all locked tokens from certain major seed investors that sold any” of their positions.

One of the challenges that has plagued ENA is the selling pressure from investors who unlock their tokens. The Foundation pulling locked seed allocations off the table removes a block of supply that could otherwise hit the market as they unlock.

Ethena wants to ensure that by October 5, there will be no investor tokens that are subject to lockups.

This is related to the second point that the Foundation raised: they have agreed with their lead investors to end future overhang that is associated with monthly VC unlocks by releasing unvested tokens.

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