Ethena Partners with Re to Connect Crypto with Trillion Dollar Reinsurance Market

Top DeFi protocol Ethena announced a partnership with Re, a restaking protocol that focuses on tokenized real-world assets for the reinsurance market, in an X post today, April 14.

Per the announcement, users who hold Ethena’s native stablecoin USDe, or its restaked version sUSDe, can earn yield by locking their tokens as reserve assets through via Re, to support insurance companies integrated with the protocol.

Through Re, holders can earn higher yield on sUSDe, with boosted Ethena rewards and Re rewards backed by the $1 trillion reinsurance market, according to an X thread from the reinsurance-focused RWA platform. Re will use sUSDe provided as collateral to underwrite health, property, business, and climate insurers that transfer their risk out to third parties, such as Re.

Holders of sUSDe can deposit into the protocol now until it reaches its $50 million deposit cap, which is meant to optimize APY as the offering scales, per the official announcement.

Ethena is the 4th largest DeFi protocol by total value locked (TVL), per data from DefiLlama, and its USDe token is the third largest stablecoin in DeFi, with a $5 billion market capitalization. However, it is still a far cry away from USDC and USDT, which tout a combined market cap of $205 billion.

The move is Ethena’s latest into the red-hot RWA market, which is making new all-time highs every week and currently boasts an almost $21 billion market capitalization, compared to the $10 billion valuation in April 2024.

In March, Ethena announced its Layer 1 blockchain, Converge, which will be a semi-permissioned blockchain network built in partnership with leading tokenized asset issuer, Securitize. The chain will see USDe, USDtb and sENA as “the core of the chain” which will serve as a settlement layer for traditional finance interacting with blockchain-backed digital currencies.