ENA Plunges 6.5% Despite Game-Changing Fee Switch & Massive Buyback Potential

Ethena's native token takes a hit just as its protocol hits a major milestone—because crypto markets love irony almost as much as they love volatility.

Fee Switch Flips—Price Doesn't

ENA's new fee redistribution mechanism went live, promising to funnel revenue back to holders. Instead, traders dumped—sending the token down 6.5% in 24 hours. Classic 'sell the news' behavior, or just another day in DeFi?

Buyback Buzz Fizzles

Speculation had been building around potential treasury buybacks after the fee switch activation. But with price action looking weak, the so-called 'bullish catalyst' turned into a margin call moment for over-leveraged degens.

Maybe the market's just allergic to fundamentals—or maybe everyone's still waiting for the 'real' pump. Either way, it's another reminder that in crypto, good news doesn't always mean green candles. Especially when Wall Street's watching and quietly shorting the hype.

The fee switch was expected in the past week. The holders of staked ENA (sENA) may receive 4.5% to 15% annualized yield. Based on the current Ethena fees of $50 to $60M monthly, the revenues will be distributed over $750M in staked ENA. 

Fee switch will bring additional utility to ENA

The fee switch milestone means ENA staking is no longer used for airdrops only. Additionally, the protocol will unlock $500M for buybacks, further rewarding the holders with potential market price growth. 

The fee switch was reached as Ethena carried a record value locked of over $13.2B. The other conditions to be fulfilled included a supply of USDe over $6B. The USDe market cap is now more than double the target at $13.7B. The second condition was for the protocol to reach cumulative revenue of $250M. 

The other milestone was for USDe to be added to four of the top five centralized exchanges with the highest derivative volumes. The condition was fulfilled after the token’s recent addition to Binance. 

The only element remaining is the technical governance process. The fee switch may mean Ethena may create up to $100M buying pressure based on current activity and fees. 

ENA price drops despite positive news

The news of eventual buybacks and fee sharing did not turn immediately bullish for ENA. The token slid soon after the news, losing around 6.5% to $0.70. 

ENA open interest is still around $1.10B, with over 77% long positions. However, a handful of short positions paid significant fees to hold, in expectation of a deeper crash. For now, the ENA price is still close to its usual range. 

Long positions were attacked first, with $6.15M liquidated in the past few hours. On Hyperliquid, ENA is extremely bullish, with over 81% of traders keeping long positions. The attempt to liquidate longs may be the reason for the price drop, while there is also pressure for ENA to expand following the fee switch news. Some of the short positions have significant unrealized gains, and traders may still try to cause an ENA correction to gain from liquidating more of the long positions.

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