Standard Chartered has published research projecting significant growth for Ethena's USDe stablecoin and ENA token through 2028. The bank expects USDe supply to reach $40 billion by the end of 2028, up from current levels, while setting a year-end 2028 price target of $2 for the ENA token.
The bank's forecasts suggest both USDe and ENA would outpace broader market growth through the forecast period. Standard Chartered projects Bitcoin will reach $300,000 and Ether will hit $18,000 by end of 2028.
Diversifying Yield Sources
Standard Chartered attributed USDe's growth potential to Ethena's expansion beyond traditional crypto basis trading. The protocol is developing yield sources across decentralized finance, institutional lending, real-world assets, and basis trades tied to equities and commodities. These sources currently generate a blended yield of 5.2%.
The bank forecasts the broader tokenized assets market will expand from approximately $350 billion today to $4 trillion by end of 2028, creating a larger pool of potential yield-generating assets for Ethena.
ENA Buyback Mechanism
Standard Chartered's valuation case for ENA centers on the connection between USDe growth and token buybacks. A fee switch approved by Ethena governance in early September directs 95% of net revenue toward ENA buybacks once USDe reaches specified supply milestones.
At $25 billion in USDe supply, Ethena estimates annual ENA buybacks could reach $375 million, assuming 6% gross protocol yield and 25% net revenue take rate. If USDe reaches $40 billion, Standard Chartered estimates annual buybacks could amount to roughly 23% of ENA's circulating market capitalization.
The bank suggested such a buyback rate would likely be unsustainable and expects ENA's price to rise until buybacks settle at a lower percentage of market value. Standard Chartered cited Uniswap as a comparison, noting UNI's annualized buyback rate has stabilized around 3% to 4% as token price increased.
At the time of the report, ENA was trading at approximately $0.27, with a market capitalization near $2.65 billion.
