Standard Chartered is forecasting that Ethena’s USDe stablecoin could hit $40 billion in supply by the end of 2028, which would trigger massive buybacks of the company’s ENA governance token. The bank’s model suggests the buyback pressure could force ENA’s price up.
The Buyback Mechanism
In early September, Ethena altered its fee structure. A vote held at that time established a rule: once USDe reaches particular supply thresholds, 95% of net revenue from its business operations is set aside for repurchasing ENA tokens. The consequence is that the larger USDe expands, the more ENA tokens get taken out of circulation.
Ethena’s calculations rest on straightforward arithmetic. When USDe reaches $25 billion, the mechanism could produce roughly $375 million in yearly ENA buybacks, according to their estimates. The projections depend on a 6% gross protocol yield combined with a 25% net revenue take rate. Push that figure up to $40 billion in USDe, and the scale of those buyback volumes grows considerably.
What the Bank Says About Sustainability
Standard Chartered estimates that at $40 billion in USDe and with ENA’s price unchanged, annual buybacks could amount to roughly 23% of ENA’s circulating market capitalization. The bank says that rate would likely be unsustainable, so it expects ENA’s price to rise until buybacks settle at a lower percentage of its market value.
Uniswap serves as the benchmark for the comparison. The bank expects UNI’s annualized buyback rate has stabilized at around 3% to 4% as its token price increased. In other words, the bank is saying ENA’s buyback activity to drive its price higher until the rate matches UNI’s.
Where the Token Stands Now
CoinGecko data shows ENA trading at around $0.27 on Wednesday, having risen by roughly 28% over the past week and 77% over the past month. The token’s market capitalization sits at about $2.65 billion.
| Metric | Current Estimate |
|---|---|
| ENA Price | ~$0.27 |
| ENA Market Cap | ~$2.65B |
| Buyback Rate at $40B USDe | ~23% of market cap |
| Stable Buyback Rate (UNI) | 3%–4% |
“Such a rate would likely be unsustainable, so it expects ENA’s price to rise until buybacks settle at a lower percentage of its market value.”
The DeFi Shift Behind USDe
The old trade of holding spot crypto while shorting perpetual futures is no longer Ethena’s sole business. With returns on that trade falling, the company shifted into DeFi, institutional lending, real-world assets and basis trades tied to equities and commodities. These new sources now produce a blended yield of 5.2%, which gives USDe more room to scale.
Ethena’s parent company expects the wider market for tokenized assets to expand from roughly $350 billion today to $4 trillion by the close of 2028. Such growth would put more assets into play for the firm to earn income from.
What This Means for Investors
The prediction depends on a limited idea: should ENA’s cost remain steady while buybacks continue to grow, the pace of those buybacks will become too large to endure. The single way out is for ENA’s value to rise sufficiently that the rate drops back within a level that can be kept up.
The argument’s circular shape is built into the forecast. Standard Chartered isn’t making the case that ENA should rise — instead, it’s arguing that buyback pressure will push it to rise.
Source material: “Standard Chartered sees Ethena’s USDe reaching $40B, ENA hitting $2,” Cointelegraph.
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