Standard Chartered expects the supply of Ethena'sDe stablecoin to grow roughly eightfold to $40 billion by the end of 2028, as the protocol broadens its sources of yield beyond crypto markets.

In a research report published Wednesday and shared with Cointelegraph, the British multinational bank initiated coverage of Ethena's ENA token with a year-end 2028 price target of $2, roughly seven times the $0.28 price cited in the report. Standard Chartered also expects USDe to slightly outpace the overall stablecoin market's growth over the period. The initiation places a decentralized finance governance token in the same research framework as the bank's year-end 2028 targets for Bitcoin and Ether.

Those forecasts imply ENA would outperform both Bitcoin (BTC) and Ether (ETH) through 2028. The bank projects BTC reaching $300,000 and ETH $18,000 by the end of the same period.

Expanding yield sources

Standard Chartered said declining returns from USDe's traditional crypto basis trade, which involves holding spot crypto while shorting perpetual futures, have pushed Ethena to expand into DeFi and institutional lending, real-world assets, and basis trades tied to equities and commodities. Those sources currently generate a blended yield of 5.2%, giving USDe more room to scale. That blended yield is a key figure to watch, since the eightfold supply projection rests on Ethena sustaining returns beyond the crypto basis trade.

The bank forecasts that the broader market for tokenized assets will grow from about $350 billion today to $4 trillion by the end of 2028 — more than a tenfold increase — expanding the pool of assets Ethena could use to generate yield.

The growth outlook follows Ethena's continued push into consumer-facing products: as previously reported by Cointelegraph, the protocol launched a USDe-powered payments app offering 6% rewards.

USDe growth could fuel ENA buybacks

The link between USDe growth and ENA buybacks is central to Standard Chartered's valuation case for the token. A fee switch approved by Ethena governance in early September directs 95% of net revenue from the protocol's business lines toward ENA buybacks once USDe reaches specified supply milestones — making USDe's supply trajectory the main variable to watch as the mechanism moves toward activation.

At $25 billion in USDe supply, Ethena estimates the mechanism could generate $375 million in annual ENA buybacks, assuming a 6% gross protocol yield and a 25% net revenue take rate.

Standard Chartered estimates that if USDe reaches its $40 billion forecast and ENA's price remains unchanged, annual buybacks could amount to roughly 23% of ENA's circulating market capitalization. The bank said such a rate would likely be unsustainable, and it expects ENA's price to rise until buybacks settle at a lower percentage of the token's market value.

As a comparison, the bank pointed to Uniswap, noting that UNI's annualized buyback rate has stabilized at around 3% to 4% as its token price increased.

Market snapshot

ENA was trading at about $0.27 on Wednesday, up roughly 28% over the past week and 77% over the past month, according to CoinGecko data. The token has a market capitalization of about $2.65 billion.