The decentralised autonomous organisation (DAO) behind Ether.fi (ETHFI) has introduced a proposal to allocate up to $50 million from its treasury for open-market token buybacks. The initiative, revealed in a governance post on Thursday, aims to support liquidity and strengthen investor confidence while the token’s market value remains depressed.
The proposed plan authorises the Ether.fi Foundation to purchase ETHFI tokens whenever the spot price falls below $3, a threshold designed to ensure efficient capital deployment during market downturns.
As of 31 October 2025, ETHFI traded at around $0.93, down nearly 89% from its 2024 peak, according to data from The Block. This sharp decline places the token well within the proposed buyback range, potentially triggering immediate market activity if the plan secures community approval.
Flexible Framework With Defined Limits
According to the proposal, the programme would activate immediately upon DAO approval and remain in effect until one of three conditions is met:
- The $50 million cap is fully utilised.
- The Foundation declares the programme complete.
- A subsequent governance vote modifies or terminates the initiative.
All purchases will be transparently executed onchain and tracked via a Dune Analytics dashboard, maintaining accountability to the community.
The Foundation added that it “intends to progressively expand buyback capacity in proportion to protocol revenues,” emphasising that the move aligns long-term token value with the platform’s financial performance. The strategy aims to create a sustainable feedback loop between protocol success and tokenholder rewards.
DeFi Protocols Embrace Corporate-Style Buybacks
Ether.fi’s move reflects a broader industry trend where leading decentralised finance (DeFi) projects are adopting traditional corporate tactics to manage capital and enhance token stability.
So far in 2025, protocol-driven token buybacks have surpassed $1.4 billion, according to CoinGecko. Major players such as Aave, Uniswap, and Hyperliquid have collectively spearheaded this new wave of onchain repurchases.
Earlier this month, Aave DAO proposed a $50 million annual buyback programme, while OpenSea announced plans to allocate 50% of its future revenue to token repurchases tied to its forthcoming SEA token. Even World Liberty Financial, a crypto initiative associated with the Trump family, recently implemented a buyback-and-burn model to retire governance tokens using protocol-generated fees.
These developments underscore the maturation of DeFi’s financial management practices, increasingly resembling those of publicly traded firms in traditional finance.
The Bigger Picture: Reinforcing Market Confidence
The Ether.fi proposal arrives amid a surge in protocol revenues and liquidity, with The Block Research reporting that DeFi protocol revenues topped $600 million this quarter, led by Uniswap and Aave.
Ether.fi, one of the largest liquid restaking and staking protocols on Ethereum, currently manages around $10 billion in total value locked (TVL) and generates approximately $360 million in annualised fees.
By redirecting a portion of this income into a buyback scheme, Ether.fi hopes to stabilise its token’s market performance and reinforce long-term confidence among investors. The initiative also represents the project’s third liquidity-support measure, following previous proposals #8 and #10 that introduced smaller-scale repurchase programmes.
Analysts suggest that Ether.fi’s decision could inspire other mid-cap DeFi projects to adopt similar financial engineering strategies, especially those with robust revenue streams but struggling token performance.
DeFi’s Strategic Shift to “Protocol-as-Business”
The growing trend of onchain buybacks highlights a fundamental evolution in DeFi governance. Protocols are increasingly operating like revenue-driven enterprises, reinvesting income to enhance tokenholder value and market stability.
Ether.fi’s $50 million buyback proposal epitomises this transformation, bridging decentralised governance with disciplined capital management. If approved, it will position Ether.fi as a leading example of how modern DeFi protocols can use financial pragmatism to build resilience amid volatile market cycles.
