Ether.fi Governance Considers Major Buyback Program to Support Token Liquidity

Ether.fi DAO has proposed a significant buyback program for its native token, ETHFI, aiming to purchase up to $50 million worth of the token on the open market. This initiative would be activated specifically when ETHFI trades below the $3 price threshold. The proposal, detailed in a governance post, would empower the Foundation to acquire ETHFI until the allocated cap is reached or until a new governance decision reverses the course of action.

A key feature of this proposal is its price-sensitive activation mechanism. Instead of relying on fixed schedules, the buyback program is directly tied to a specific price point, ensuring that surplus fees generated by the protocol are strategically used to support the token's market value. As of October 31, 2025, ETHFI was trading at approximately $0.93, a price point well below the $3 trigger for the buyback program. The DAO has made onchain reporting available and initiated a four-day Snapshot vote to secure approval for this program.

Buybacks and Protocol Finance

Data from CoinGecko indicates that protocols have collectively executed over $1.4 billion in buybacks during 2025, a trend driven by projects allocating their fee income towards token repurchases. Buyback programs are increasingly being utilized as a cash-management tool for projects that benefit from consistent fee revenue and face periods of softer market demand. Ether.fi, in particular, reports a substantial Total Value Locked (TVL) of approximately $10 billion and generates roughly $360 million in annualized fees, figures that provide a strong financial foundation for a considerable buyback program.

Should the Ether.fi plan receive approval, it is set to commence immediately and will continue until one of three conditions is met: the $50 million buyback limit is reached, the Foundation makes a decision to halt the program, or a new governance vote is passed to terminate it. The DAO's intention is to scale the buyback capacity in correlation with the protocol's revenue growth, particularly while ETHFI remains below the $3 mark. The protocol has previously implemented two smaller initiatives aimed at liquidity support, identified as Proposals #8 and #10.

The market's reaction to buyback news is often varied, as traders evaluate the potential impact of supply reduction against the long-term utility and adoption of the token. A broader trend is evident across the cryptocurrency space, with other prominent protocols such as Aave and OpenSea also proposing or allocating revenue for buybacks in 2025. This reflects a growing strategy among revenue-generating projects to support their token ecosystems. Observers anticipate that maintaining onchain transparency and providing regular reporting will be crucial factors in shaping stakeholder trust and confidence in these initiatives.

The ultimate decision on this proposal rests with the governance voters, who will cast their ballots in the coming days. All onchain records related to the proposal and the voting process are available for public review, ensuring transparency. If approved, the plan would establish a direct link between the protocol's financial performance, specifically its fee generation, and active market support for ETHFI token holders. Market participants are looking forward to the announcement of clear execution steps following the governance vote.