Ethena’s USDe stablecoin surges to $12 billion supply, fueled by leveraged yield loops on Pendle and Aave
Quick Take The growth stems from USDe’s unique value proposition as a yield-bearing, crypto-native stablecoin that generates returns through delta-neutral hedging strategies. The following is excerpted from The Block’s Data and Insights newsletter.
Ethena's USDe has continued its remarkable growth, with its supply surging to $12 billion as of Aug. 25, more than 15% of USDC supply, the second-largest stablecoin. This positions USDe as a strong contender to challenge the dominance of stronghold stablecoins like USDC and USDT in the coming months.
The growth stems from USDe's unique value proposition as a yield-bearing, crypto-native stablecoin that generates returns through delta-neutral hedging strategies. Unlike non-yielding alternatives such as USDC and USDT, USDe offers holders 9%-11% APY by maintaining a peg through collateral positions in ETH/BTC paired with short futures positions, capitalizing on positive funding rates in the current rising market environment.
Much of the supply expansion is driven by sophisticated yield amplification strategies, where users stake USDe as sUSDe, tokenize it on Pendle, then create recursive borrowing loops on Aave to achieve leveraged yields.
Aave, a decentralized lending protocol, allows users to deposit their PT-sUSDe tokens as collateral to borrow additional USDe. This borrowed USDe can then be restaked and re-tokenized on Pendle, creating a recursive loop that amplifies exposure to the underlying yields. The mechanism has locked a significant supply of USDe in Pendle and Aave, creating a reflexive growth cycle that pays significant leveraged returns.
While the growth reflects genuine demand for yield in favorable market conditions, the leverage-dependent nature of the ecosystem raises questions about sustainability should funding rates turn negative or market conditions deteriorate, echoing patterns seen in previous DeFi cycles.
This is an excerpt from The Block's Data Insights newsletter . Dig into the numbers making up the industry's most thought-provoking trends.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
You may also like
A 6200-fold profit: Who is the biggest winner of Moore Threads?
On December 5, Moore Threads officially debuted on the STAR Market, opening at 650 yuan, which represents a 468.78% surge compared to its issue price of 114.28 yuan.

K-shaped Divergence in Major Asset Pricing: The Subsequent Evolution of "Fiscal Risk Premium"
Southwest Securities believes that the current market is in a dangerous and fragmented period driven by "fiscal dominance," where traditional macro logic has failed, and both U.S. stocks and gold have become tools to hedge against fiat currency credit risk.

"Shadow Fed Chair" Hassett speaks out: The Federal Reserve should cut rates next week, expected 25 basis points
Hassett stated in a media interview that the FOMC now appears more inclined to cut interest rates, and he expects a rate cut of 25 basis points.

Key Market Intelligence for December 5: How Much Did You Miss?
1. On-chain funds: Today, $55.7M flowed into Ethereum; $51.4M flowed out of Base. 2. Top gainers and losers: $OMNI, $FTN. 3. Top news: At 23:00 tonight, the US will release the annual Core PCE Price Index for September, with an expected 2.9%.

