Standard Chartered has initiated coverage of Ethena with a decidedly bullish outlook, projecting in a new client report that the protocol’s ENA token could surge to $2 by the end of 2028. The bank’s forecast also anticipates that Ethena’s synthetic dollar, USDe, will see its circulating supply expand eightfold to $40 billion over the same period.
The price target represents a potential upside of approximately 669% from ENA’s price of $0.26 on Wednesday. This optimistic forecast from a major financial institution signals growing interest in Ethena’s novel approach to creating a dollar-pegged asset and generating sustainable, on-chain yield.
Standard Chartered sets ena growth engine
Standard Chartered’s analysis is built on two core pillars: the aggressive expansion of Ethena’s yield-generating strategies and a powerful token buyback mechanism. The bank argues that Ethena is successfully moving beyond its initial reliance on the crypto basis trade, a strategy that captures funding rate payments from perpetual futures markets.
As returns from that specific trade have compressed, Ethena has been actively diversifying its asset base.
According to the report, this diversification is the key to achieving the scale necessary to support a $40 billion supply for USDe. The bank highlights new yield sources including real-world assets (RWAs), institutional and DeFi lending, other liquid stablecoins, and even basis trades linked to equities and commodities.
This pivot allows the protocol to tap into a much larger and more varied pool of potential returns, reducing its dependence on any single market condition. The expansion into new asset classes like tokenized equities is a clear example of this strategy in action.
Ethena currently ranks as the fourth-largest stablecoin issuer, behind Tether, Circle, and Sky. However, it is the second-largest issuer of a yield-bearing stablecoin, a category that Standard Chartered notes currently accounts for just 5% of the total stablecoin market. The bank’s projection implicitly assumes this niche will experience significant growth, with Ethena leading the charge.
This aligns with a broader forecast from the bank that the market for tokenized assets could swell from $350 billion today to $4 trillion by the end of 2028.
Unsustainable buybacks could force ENA price higher
The second, and perhaps more compelling, part of Standard Chartered’s thesis centers on Ethena’s tokenomics. Following a governance vote that passed with unanimous approval, Ethena’s fee switch now directs 95% of all net revenue generated under the brand to be used for programmatic buybacks of the ENA token on the open market.
The bank’s analysts presented a clear chain of logic: if USDe’s supply reaches the projected $40 billion while ENA’s price remains near its current level, the resulting buybacks would be immense. By their calculation, annualized buybacks would amount to about 23% of the token’s total circulating value.
Standard Chartered views this level as “too high to be sustainable” over the long term. This creates a powerful, reflexive relationship where protocol success drives buy pressure.
“For these buybacks to be sustainable, the ENA token price will rise,” the bank wrote in its note. The analysts drew a direct comparison to the decentralized exchange Uniswap. After its own fee switch was activated in December 2025, the annualized buyback rate for its UNI token settled between 3% and 4%.
The bank notes that UNI’s price has roughly tripled since it began covering the token, with that price appreciation being the primary mechanism that offset what would have otherwise been an unsustainably high buyback rate.
A new blueprint for protocol value accrual
Ethena’s model presents a stark contrast to traditional stablecoin issuers, whose revenue from reserve assets typically benefits the corporation itself rather than a decentralized ecosystem of token holders. By programmatically returning the vast majority of protocol revenue to ENA holders through buybacks, Ethena creates a direct and transparent link between the growth of USDe and the value of its governance token.
This flywheel effect, where increased USDe adoption generates more revenue, which in turn fuels more ENA buybacks and drives up the token’s price, could establish a new blueprint for value accrual in decentralized finance.
However, such complex systems are not without their own unique sets of risks, and the broader DeFi space has shown that even robust protocols can face significant challenges. For Ethena, maintaining security and stability across its various hedging and yield-generation venues is paramount.
The growing institutional interest in crypto is generally a positive sign for the tokenization of assets, but the infrastructure to support these assets on-chain is still developing.
Navigating the road to $40 billion
While the outlook is positive, Standard Chartered was careful to outline the primary risks to its forecast. The most significant headwind would be a slower-than-expected growth in the overall market for yield-bearing stablecoins. If the demand for such products does not expand as anticipated, Ethena’s growth could be constrained regardless of its execution.
A related risk is the pace of adoption for tokenized real-world assets. Ethena’s scalability is increasingly tied to its ability to use RWAs to generate yield. Any weakness or delay in the growth of that on-chain ecosystem would directly impact the protocol’s ability to scale USDe toward the $40 billion target.
Investors will be closely watching for signs that both the yield-bearing stablecoin market and the broader RWA sector are gaining traction.
Beyond the market risks highlighted by the bank, Ethena also faces the inherent technical and counterparty risks of its model. The protocol relies on centralized exchanges to execute its perpetual futures hedges, introducing counterparty risk. Furthermore, as a complex DeFi protocol, it remains exposed to the ever-present threat of smart contract vulnerabilities.
Successfully navigating these challenges will be critical for Ethena to realize the substantial growth potential identified by Standard Chartered.