Tag: Ethena buybacks

Standard Chartered’s $ENA Valuation Case

Standard Chartered has outlined a bullish valuation case for Ethena’s $ENA token, arguing that the token could rise roughly sevenfold if the $USDe stablecoin reaches $40 billion in circulating supply. The analysis centers on Ethena’s newly approved revenue-sharing and buyback framework.

$ENA traded up 22% over seven days and 54% over 30 days, but declined 3.3% over the previous 24 hours, according to CoinGecko. The token’s market value is approximately $2.5 billion, ranking it 43rd among crypto assets.

The 23% Problem Behind the Sevenfold Target

Standard Chartered analyst Kendrick’s argument is based on the relationship between Ethena’s annual token buybacks and $ENA’s circulating market value. If $USDe reaches $40 billion while the $ENA price remains unchanged, annual buybacks would equal approximately 23% of the token’s circulating market value.

The bank considers that ratio too high to remain sustainable. Its conclusion is that $ENA’s price would rise until the buyback amount represented a more defensible percentage of the token’s market value.

Standard Chartered compares the potential outcome with Uniswap, where a fee switch was activated in December 2025. Annualized $UNI buybacks have stabilized at approximately 3% to 4% of market value, a level reached partly because $UNI roughly tripled over the same period.

The bank set a $100 price target for $UNI when it began coverage in June and said this month that the target may now be too low. Applying what Standard Chartered views as Uniswap’s equilibrium to Ethena produces the projected sevenfold increase for $ENA.

Ethena Buybacks Begin at $7.5 Billion of $USDe Supply

Ethena’s fee switch passed a Snapshot vote held from Aug. 27 to Sept. 2. The proposal received 17.8 million $ENA votes in favor and none against across 88 votes, exceeding the 5 million quorum. The Ethena Foundation confirmed the result on its governance forum on Sept. 8.

The approved schedule links the share of revenue allocated to buybacks to $USDe’s circulating supply. The revenue take rate is 5% at $7.5 billion of supply, 10% at $10 billion, 15% at $15 billion and 20% at $20 billion. No tokens are purchased before the first threshold is reached.

$USDe supply currently stands at $4.90 billion, according to DefiLlama. That leaves Ethena approximately 53% of the required growth away from the point at which the first buybacks would begin.

Standard Chartered’s illustrative table extends the schedule to a 25% revenue take rate at $25 billion of $USDe supply and attributes that extension to Ethena. However, the governance proposal itself publishes tiers only through $20 billion.

The proposal identifies three revenue sources covered by the fee switch: $USDe savings, Ethena Whitelabel stablecoins and “Ethena [X],” which the Foundation said was launching the following week. Ethena Pay, a savings and payments application built on $USDe, launched on Avalanche on Sept. 1.

Ethena generated $20.1 million in fees during the previous 30 days and $1.05 billion since inception, according to DefiLlama.

Ethena Replaces Compressed Basis-Trade Returns

The original source of $USDe’s yield was the crypto basis trade, which combines a long spot position with short perpetual futures. That strategy generated returns above 20% at points in 2024, but those rates have since compressed. $USDe supply declined alongside the lower yields from a 2025 peak of approximately $15 billion.

$USDe is now the fourth-largest stablecoin, behind Tether’s USDT, Circle’s USDC and Sky’s USDS. DefiLlama values the overall stablecoin market at $306 billion.

Ethena has been replacing basis-trade returns with five additional yield sources. Standard Chartered estimates that the blended yield is currently 5.2%, compared with an average of 7% since Ethena’s inception.

Over-collateralized DeFi lending, primarily through Aave and Morpho, generates approximately 4.9%. Institutional lending, about half of which is arranged through Maple, generates between 5% and 7%. Liquid stablecoin holdings, led by PayPal’s PYUSD, generate 4.0%, while credit products beyond Treasury bills, represented by Centrifuge’s JAAA, generate 5.0%.

The newest source applies Ethena’s delta-neutral strategy to equity and commodity perpetuals. Standard Chartered says this segment grew from zero to $15 million over 10 months.

A framework for tokenized equity basis trades filed on Ethena’s governance forum in August approves 17 assets on Binance and three on OKX. The framework sets position caps at 10% of perpetual open interest and 20% of a token’s circulating supply.

Key Risks Identified by Standard Chartered

Standard Chartered’s primary stated risk is that yield-bearing stablecoins expand more slowly than expected. The bank also warns that real-world assets on-chain may fail to grow from approximately $40 billion today to its forecast of $2 trillion by the end of 2028.

Slower growth in tokenized real-world assets could leave Ethena with insufficient collateral to generate yield. The risk is particularly relevant as Ethena expands beyond its original basis-trade model and relies on a broader mix of lending, stablecoin, credit and derivatives strategies.

$ENA Investor Unlocks End on Oct. 5

The buyback mechanism is the second part of a tokenomics overhaul announced by Ethena on Aug. 27. The Ethena Foundation purchased locked $ENA through over-the-counter transactions from seed investors who had been allocated more than 0.25% of supply and had sold any tokens since the market peak on Oct. 10, 2025.

Investors in that group who had not sold their tokens were offered par value, but none accepted the offer. Remaining investor unlocks will instead be accelerated into a single release on Oct. 5, bringing the monthly unlock schedule to an end.

Approximately 12% of total $ENA supply will remain locked after the release. Those tokens are held by the team, the ecosystem and the Foundation. StablecoinX, the Nasdaq-listed $ENA treasury vehicle, holds approximately 20% of total supply under the lockup terms disclosed in its Securities and Exchange Commission (SEC) filings.

The Aug. 27 announcement also covered a Master Framework Agreement between the Ethena Foundation and Ethena Labs. The agreement assigns protocol intellectual property and residual economics to the Foundation rather than to equity holders in Ethena Labs.

Ethena described the arrangement as an agreement in principle and said it expects to publish the document in October. Standard Chartered includes the agreement in its investment case for how value could accrue to $ENA.

Why This Matters

Ethena’s valuation depends on whether the growth of $USDe, the durability of its yield sources and the buyback mechanism can combine to support stronger demand for $ENA. The program does not begin purchasing tokens until $USDe supply reaches $7.5 billion, making stablecoin expansion an immediate condition for the first stage of the tokenomics plan.

The October unlock is another important event for $ENA markets because it ends the monthly investor release schedule and concentrates remaining investor unlocks into one date. At the same time, the Foundation’s control of protocol intellectual property and residual economics is expected to become clearer when the Master Framework Agreement is published.

Frequently Asked Questions

What is Standard Chartered’s outlook for $ENA?

Standard Chartered’s analysis suggests that $ENA could rise roughly sevenfold if $USDe reaches $40 billion in supply and buybacks settle at a sustainable share of the token’s market value.

When will Ethena begin buybacks?

Buybacks begin when $USDe circulating supply reaches $7.5 billion. The approved revenue take rate is 5% at that level and increases to 10% at $10 billion, 15% at $15 billion and 20% at $20 billion.

What happens to the remaining $ENA unlocks?

Remaining investor unlocks will be released in a single release on Oct. 5, ending the monthly schedule. About 12% of total $ENA supply will remain locked afterward, held by the team, the ecosystem and the Foundation.