Ethena ends token incentives for USDe after 85% decline in rewards

Ethena is pulling the plug on ENA token incentives for USDe stakers, marking the end of a rewards program that once powered one of crypto’s fastest-growing stablecoin experiments. The incentives have been cut by roughly 85% since 2024, and after this month, they drop to zero.

The incentive era winds down

Ethena’s synthetic dollar, USDe, rode a wave of generous ENA token emissions to scale rapidly. The protocol has distributed over $750 million in total rewards to users since launch, a staggering sum that helped USDe’s circulating supply balloon to approximately $15 billion at its peak in October 2025.

USDe’s supply has since contracted by more than 65%, falling below $5 billion as of late August 2026. The 85% reduction in discretionary ENA rewards tracked a cooling funding-rate environment, the very mechanism that generates yield for USDe holders. When perpetual futures funding rates run hot, Ethena’s delta-neutral strategy prints money. When they cool off, the economics get tighter, and subsidizing growth with token emissions becomes harder to justify.

Governance gets a makeover

The Ethena Foundation terminated recurring ENA investor unlocks as of October 5, 2026, completing a buyout of locked ENA.

A governance proposal approved in September 2026 ties ENA buybacks directly to USDe supply milestones, with the first threshold set at $7.5 billion. If USDe’s circulating supply climbs back above that level, 95% of the protocol’s net revenue gets channeled into buying ENA off the open market.

The sustainability question

Ethena has shifted its strategic priorities toward institutional credit products and white-label stablecoin offerings. USDe lost more than two-thirds of its supply as incentives dried up, falling from roughly $15 billion to below $5 billion. Rebuilding from below $5 billion to the $7.5 billion threshold needed to trigger buybacks requires organic growth in an environment where funding rates aren’t cooperating.

The $750 million already spent on rewards represents a significant customer acquisition cost. The buyback mechanism ties ENA buybacks to USDe supply performance rather than continuous token emissions, meaning ENA holders are making a bet on USDe’s ability to recapture lost ground.