Ethena’s USDe stablecoin skyrockets, surpassing $2 billion in supply.
Ethena Labs’ synthetic dollar has experienced an impressive surge, reaching a market capitalization of $2 billion in less than two months since its release on Ethereum’s public mainnet. The stablecoin, known as USDe, has seen its market cap grow by over 147% in the last 30 days, making it the fifth largest token in the stablecoin market according to CoinGecko.
What sets USDe apart from other stablecoins is its unique approach. Instead of relying solely on cash reserves and equivalents to maintain its peg to fiat currencies like the U.S. dollar, USDe utilizes derivative hedging against collateral positions denominated in Bitcoin (BTC), Ethereum (ETH), ETH liquid staking tokens, and Tether (USDT).
With a market cap of $2 billion, Ethena’s synthetic dollar has surpassed its competitors. Currently, only USDT, Circle’s USD Coin (USDC), DAI, and First Digital USD (FDUSD) are ahead of USDe among stablecoin options.
However, despite its rapid rise, industry experts have expressed concerns about USDe’s similarities to UST, Terra’s algorithmic stablecoin, which caused a $60 billion collapse in May 2022. Blockchain developer and prominent Fantom (FTM) contributor Andre Cronje recently discussed these concerns in a detailed tweet, while CryptoQuant Founder and CEO Ki Young Ju questioned whether USDe’s inclusion of BTC as a backing asset could lead to a similar outcome.
It remains to be seen how USDe will navigate these concerns and continue its growth trajectory.
