Key Highlights:
- According to the Standard Chartered research team, ENA will reach $0.42 by the end of 2026, $1.10 in 2027, and $2.00 by 2028.
- To maintain a 5.2% APY, the protocol is shifting from basic trades to RWAs, DeFi lending, and T-bill-backed products like USDtb.
- The risks of structural inflation have dropped down after an Ethena Foundation buyout ended longstanding schedules of token unlocks for early seed investors.
Standard Chartered has initiated coverage on Ethena (ENA), predicting a significant 7x price surge that could drive the native token to $2.00 by the end of 2028. This bullish outlook is being supported by analysts and structural changes within the project aim to gradually increase the total token supply.
Core Drivers for Asset Expansion
The project was launched in late 2023 and USDe shattered growth records to become the fastest stablecoin to cross a $10 billion market cap. The project managed to accomplish the feat in just nine months. Growth was further amplified by key structural integrations into major institutional platforms, including BlackRock’s Aladdin, Coinbase, and Robinhood.
To build a more resilient, multi-environment yield framework, Ethena is diversifying the collateral behind USDe. Its initial yield was built purely on a crypto-based trade with long spot positions and short perpetual futures, but the protocol has incorporated additional funding sources. These new collateral avenues include:
- DeFi and Institutional Lending: The amount of capital invested in platforms such as Aave, Morpho, and Maple Finance to generate additional yield.
- Liquid Stablecoins: Portfolios with yield-generating assets such as PayPal’s PYUSD.
- Real-World Assets (RWAs): Tokenized short-term credit products and Treasury bill funds, notably BlackRock’s BUIDL fund, which backs its newly introduced lower-yield stablecoin variant, USDtb.
The blended yield for these categories is 5.2%, which gives a baseline to reference, as broader tokenized RWAs on blockchains are expected to expand from $40 billion to $2 trillion by 2028.
Revenue Reinvestment and Token Dynamics
A significant part of the positive valuation forecast is due to structural changes in the protocol’s valuation model. Historically, Ethena Foundation has been running schedules of token unlocks that diluted the market share, but recently, it completed a buyout of locked tokens belonging to its major seed investors, thus ending the historical unlocking of tokens. In addition, a newly approved fee switch is in place that creates a framework for 95% of net revenues on all existing and future lines of business to be channeled into a programmatic buyback-and-burn mechanism.
In this model, the volume of native token purchases gradually increases as the USDe supply increases. The net revenue take rate is estimated at 5% at the USDe level of $7.5 billion, and the annualized buyback value is estimated at $22.5 million. The take rate would jump to 25% at $25 billion, for a total annual buyback volume of $375 million. If USDe reaches $40 billion by the end of 2028, the buyback rate should hover around 23%, resulting in a contraction of the same magnitude and a sharp rise in token prices.
Ethena Whitelabel and Ethena Pay Rollouts
Although Ethena is mainly developing a stablecoin, it is also working on additional services for other revenue streams of its buyback program:
- Ethena Whitelabel: A stablecoin-as-a-service initiative that allows third parties and networks to launch their own stablecoins on Ethena, while still keeping the yield-generation process in the Ethena system.
- Ethena Pay: A mobile banking and payments application based on the USDe infrastructure that will offer transaction services and provide superior savings rates to its retail customers compared to traditional financial products.
Multi-Year Market Forecasts for Ethena Price
The bank’s digital asset research team expects the ENA price to hit $0.42 by the end of 2026, $1.10 by 2027, and the $2.00 mark by 2028. Over the same time period, this growth path is projected to outpace the relative growth of both Bitcoin and Ethereum.
But analysts pointed out that achieving these goals will rely on the continued growth of yield-bearing stablecoins that can be backed by non-yielding competitors, as well as the rapid growth of blockchain-based RWA markets to meet the increased collateral needs of Ethena.
