The economics of Ethena’s USDe yield and ENA buyback schedule
Ethena Labs Research proposes a new ENA buyback schedule triggered when USDe supply reaches $7.5 billion. The plan uses a percentage levy on protocol revenue to fund buybacks, potentially impacting the current 3.72% sUSDe yield.
The USDe circulating supply is $4.07 billion as of August 30, 2026. This figure requires $3.43 billion in growth to reach the $7.5 billion threshold for the first tier of ENA buybacks. The proposal from Ethena Labs Research, which published on August 27, 2026, replaces the 2024 success criteria that required $6 billion in supply and $250 million in revenue. The new schedule uses a pure supply metric to determine the levy rate. The Snapshot vote for this decision closes on September 2, 2026. As of August 30, 17,014,325 ENA stood in favor of the proposal with zero votes against. The quorum for this vote is 5,000,000 ENA. Once the supply hits $7.5 billion, the protocol begins the buyback process using 95 percent of the Ethena Foundation net income. The program targets $15 billion in supply and $100 billion within five years. Will USDe supply reach that $15 billion mark?
Yield mechanics and market competition
Ethena generates revenue from perpetual futures funding rates and ETH staking rewards. The ENA buyback schedule triggers a five percent levy at $7.5 billion USDe supply, moves to ten percent at $10 billion, and reaches a twenty percent levy when the supply hits $20 billion. A 10 percent levy on gross protocol revenue reduces the sUSDe APY by 10 percent regardless of the distribution. If the protocol yield stays at 8 percent, a 10 percent take leaves 7.2 percent for stakers. You should monitor these rates against the 4.75 percent yield of sUSDS. The protocol also uses interest from BlackRock’s BUIDL fund to stabilize returns. Over the last 30 days, $175 million was distributed across three lines: 34.3 percent to sUSDe staking, 34.3 percent to partner payouts, and 31.4 percent to the Aave liquid leverage line. A 10 percent levy would take $6.0 million from the sUSDe distribution and $11.5 million from the reward lines based on this data. The ENA buyback program is a practical revenue sharing mechanism for stakers. This program aims to absorb about one tenth of the $512 million in scheduled ENA unlocks. Aave and Pendle help create a leverage loop for the protocol. Aave held $8.5 billion in Ethena assets by September 2025. Messari reports that the current sUSDe yield is approximately 3.72%.
| Wrapper | Yield source | Rate type | Headline risk |
|---|---|---|---|
| sUSDe | Perp funding + ETH staking | Variable | Funding flip, counterparty |
| sUSDS | Sky Savings Rate | Administered | Rate cut, collateral risk |
| USDY | Short-duration T-bills | Tracks Fed funds | Interest rate risk |
Reserve fund management and tail risks
The Reserve Fund holds $62 million in USDtb and a USDtb/USDC liquidity pool. This balance is nine times larger than the $7 million required in a conservative tail-risk scenario. LlamaRisk and Blockworks Advisory recommend that Ethena directs USDtb interest to sUSDe holders instead of the fund. The fund is $62 million, which is significantly higher than the $6.3 million Blockworks recommends. This surplus exists because the USDe TVL contracted through March 2026. The fund ratio is 1.061% as of the end of March 2026. The fund composition includes $41.98 million in USDtb and $20.02 million in a USDtb-USDC pool. The fund was $23 million in February, which was a reduction from earlier estimates. Blockworks assumes 50 bps slippage when calculating these requirements. High funding rates attract users, but these rates can flip negative during bearish cycles.
Join the discussion