Key Highlights:
- Standard Chartered expects Ethena’s $USDe supply to reach $40 billion as the stablecoin expands beyond its traditional crypto basis trade.
- Ethena’s fee switch directs 95% of net revenue toward $ENA buybacks after specified $USDe supply milestones are reached.
- The bank forecasts the tokenized-asset market will grow from about $350 billion to $4 trillion by the end of 2028.
Standard Chartered links $USDe growth to higher $ENA value
Standard Chartered has based its valuation outlook for Ethena’s $ENA token on continued growth in $USDe, the protocol’s dollar-denominated synthetic asset. The bank expects $USDe supply to reach $40 billion, supported by Ethena’s expansion into decentralized finance, institutional lending, real-world assets, and basis trades connected to equities and commodities.
The expansion follows declining returns from $USDe’s traditional crypto basis trade, which involves holding spot crypto while shorting perpetual futures. Standard Chartered said the newer sources of yield currently produce a blended return of 5.2%, giving $USDe additional capacity to scale.
The bank also forecasts that the wider tokenized-asset market will increase from about $350 billion currently to $4 trillion by the end of 2028. That projected growth would expand the pool of assets Ethena could use to generate yield.
Ethena buyback mechanism could support $ENA demand
The relationship between $USDe supply and $ENA buybacks is central to Standard Chartered’s valuation case. Ethena governance approved a fee switch in early September that directs 95% of net revenue from the protocol’s business lines toward $ENA buybacks once specified $USDe supply milestones are reached.
At a $USDe supply of $25 billion, Ethena estimates that the mechanism could generate $375 million in annual $ENA buybacks. That estimate assumes a 6% gross protocol yield and a 25% net revenue take rate.
Standard Chartered estimates that if $USDe reaches its $40 billion forecast while the price of $ENA remains unchanged, annual buybacks could equal roughly 23% of the token’s circulating market capitalization. The bank said that level would likely be unsustainable, and expects the price of $ENA to rise until buybacks represent a smaller percentage of its market value.
Standard Chartered compares Ethena with Uniswap
Standard Chartered used Uniswap as a comparison for how buyback rates could evolve. The bank noted that UNI’s annualized buyback rate has stabilized at around 3% to 4% as the token’s price increased.
$ENA was trading at about $0.27 on Wednesday, according to CoinGecko data. The token was up roughly 28% over the previous week and 77% over the previous month, giving it a market capitalization of about $2.65 billion.
Why This Matters
Ethena’s outlook depends on whether $USDe can continue scaling as yield from its original crypto basis trade declines. Its move into DeFi, institutional lending, real-world assets, and equity- and commodity-linked basis trades is intended to broaden the sources of return available to the protocol.
The proposed buyback structure makes $USDe adoption directly relevant to $ENA demand. However, Standard Chartered’s comparison with Uniswap highlights the importance of token price appreciation: as the value of $ENA rises, buybacks would account for a smaller share of its circulating market capitalization. The projected expansion of tokenized assets through 2028 could provide Ethena with a larger potential market for yield-generating activities.
Frequently Asked Questions
What is Standard Chartered’s $USDe forecast?
Standard Chartered expects $USDe supply to reach $40 billion. The bank also forecasts that the broader tokenized-asset market will grow from about $350 billion to $4 trillion by the end of 2028.
How could $USDe growth affect $ENA buybacks?
Once specified $USDe supply milestones are reached, Ethena’s fee switch directs 95% of net revenue from its business lines toward $ENA buybacks. At $25 billion in $USDe supply, Ethena estimates annual buybacks of $375 million under its stated yield and revenue assumptions.
What is the current price and market capitalization of $ENA?
$ENA was trading at about $0.27 on Wednesday. CoinGecko data showed the token up roughly 28% over the past week and 77% over the past month, with a market capitalization of about $2.65 billion.