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      Ethena Discontinues Token Incentives for USDe Following Significant Reward Decline

      Ethena has announced the termination of ENA token incentives for USDe stakers, concluding a rewards program that significantly contributed to the growth of its synthetic dollar protocol. Since 2024, the incentives have decreased by approximately 85%, and they will cease entirely after this month. The program had previously distributed over $750 million in rewards, which helped USDe's circulating supply reach around $15 billion at its peak in October 2025.

      However, as of late August 2026, USDe's supply has contracted by more than 65%, dropping below $5 billion. This decline in supply coincides with a cooling funding-rate environment, which affects the yield generation for USDe holders. The reduction in ENA rewards reflects the challenges of sustaining growth through token emissions when market conditions are less favorable.

      In a strategic shift, the Ethena Foundation has also ended recurring ENA investor unlocks as of October 5, 2026, completing a buyout of locked ENA. A governance proposal approved in September 2026 links ENA buybacks to USDe supply milestones, with the first target set at $7.5 billion. If USDe's circulating supply exceeds this threshold, 95% of the protocol's net revenue will be allocated to purchasing ENA from the open market.

      Ethena is now focusing on institutional credit products and white-label stablecoin offerings. The transition from a rewards-based model to one reliant on organic growth presents challenges, particularly in an environment where funding rates are not favorable. The success of this new strategy will depend on USDe's ability to recover its supply and attract further investment.

      © 2026 KLEA News. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

      Source: KLEA News

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