Ethena’s synthetic USDe dollar has emerged as the fastest growing USD-pegged stablecoin in the past 30 days after its market capitalization soared 73% to an all-time high of $4.77 billion.
surge This makes USDe the third-largest stablecoin, surpassing DAI's market capitalization of $4.7 billion. However, USDe still lags behind Tether’s USDT ($135 billion) and Circle’s USDC. For $40 billion.
Guy Young, co-founder and CEO of Ethena Labs, said:
“We are starting to see the impact as USDe blackholes all stablecoins within DeFi and warps the lending market to a new base rate. However, at the moment the scale of DeFi has completely closed the arb. Ethena's next step is to partner directly with asset managers ranging from $100 billion to $1 trillion or more that can provide the capital it needs. It's about working together. ”
Meanwhile, this rapid growth reflects momentum from earlier this year, when USDe's market capitalization reached the $3 billion mark just four months after it went public in February.
What is driving USDe growth?
Market participants said the sharp rise in USDe reflected strong dynamics supported by bullish sentiment and demand for alternative yield assets.
Unlike USDT and USDC, which are widely used for trading, the majority of USDe tokens are held to earn rewards. This suggests that users primarily view USDe as a yield-producing asset rather than a medium of exchange.
In fact, USDe offers a particularly attractive yield generated through Ethereum staking rewards hedged against ETH short funding rates. According to Ethena's website, sUSDe holders can earn a 29% annual percentage yield (APY).
Notably, some critics have drawn similarities between the Ethena model and the ill-fated Terra Luna project. In May 2022, Terra's algorithmic stablecoin collapsed as its aggressive growth strategy became unsustainable, leading to a significant downturn in the crypto market.
Nevertheless, demand remains high, as evidenced by the fact that its supply and annual interest rates on borrowing are significantly higher than those of USDT and USDC. Abe.
Aave is the largest DeFi lending protocol in the cryptocurrency ecosystem, with approximately $30 billion in total value locked (TVL).
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