Standard Chartered expects Ethena’s USDe supply to increase eightfold to $40 billion by the end of 2028 and has initiated coverage of ENA with a $2 price target. The target is nearly seven times the $0.28 reference price used in the bank’s report.
The forecast raises a key question about valuation: can Ethena expand its yield-generating businesses and buyback program quickly enough to support such a significant increase in ENA’s value?
Standard Chartered expects USDe to grow slightly faster than the overall stablecoin market and projects ENA to outperform Bitcoin and Ether through 2028. These estimates are forward-looking projections, not guaranteed outcomes. Their success depends on Ethena growing revenue and allocating enough of that revenue toward ENA buybacks and demand.
Diversified Yield Underpins Ethena’s Buyback Model
Ethena originally generated much of its yield through the crypto basis trade. With those returns declining, the protocol has broadened its strategy to include DeFi, institutional lending and basis trades involving equities and commodities. Standard Chartered estimates the combined yield from these sources at 5.2%.
A broader mix of strategies gives Ethena more potential sources of income, but it does not eliminate exposure to market conditions. Standard Chartered expects the tokenized-asset market to expand from $350 billion to $4 trillion by 2028. Ethena would need to capture part of that growth and convert it into recurring revenue for the projection to materialize.
Ethena governance has approved a fee switch that allocates 95% of net revenue from certain business lines to ENA buybacks once USDe reaches specified supply milestones. Under certain assumptions, Ethena estimates that $25 billion of USDe supply could generate approximately $375 million in annual buybacks. The estimate depends on both reaching the supply threshold and maintaining the projected revenue levels.
At $40 billion in USDe supply, Standard Chartered estimates that annual buybacks could amount to around 23% of ENA’s market capitalization if the token price remained unchanged. The bank views that ratio as unsustainable and expects ENA’s price to appreciate, reducing the size of buybacks relative to market value. The report points to Uniswap’s annual buyback rate of roughly 3% to 4% as a comparison.
The flat-price scenario also shows why the $2 forecast is not simply a calculation based on buybacks. If ENA’s price stayed unchanged while USDe expanded, buybacks would become unusually large compared with the token’s circulating market value. The bank’s forecast instead assumes that ENA appreciates as the protocol grows, bringing the buyback-to-market-cap ratio toward a more sustainable range. That is a valuation assumption, rather than evidence that demand will necessarily absorb the buying or support the projected valuation.
Ethena’s revenue outlook remains sensitive to market conditions. Lower basis-trade returns, weaker activity in relevant markets or slower adoption of newer yield strategies could reduce the income available for buybacks. These are potential risks to the forecast rather than confirmed developments.
Regulation is another variable for stablecoins and yield-bearing dollar products. Changes in policy could influence distribution, adoption and demand without directly changing the $2 ENA target outlined by Standard Chartered.
The bank’s September 30 market snapshot placed ENA near $0.27 and its market capitalization at about $2.65 billion. ENA had gained roughly 28% over the previous week and 77% over the previous month, according to the report. The $0.28 figure is a separate reference price used by Standard Chartered when comparing the current valuation with its $2 target.
The immediate setup combines strong recent price momentum with a longer-term growth thesis. For the $2 projection to develop, USDe expansion, diversified yield generation and ENA buybacks would need to reinforce one another. Any shortfall in supply growth or net revenue could weaken those assumptions, making the target dependent on execution across several parts of Ethena’s business model.
