Market Cap of Ethena's USDe Stablecoin Surged 60% In Six Weeks

Adoption of Ethena’s yield-bearing stablecoin, USDe, is soaring.

Data from CoinMarketCap shows USDe’s market cap surging by $1.46 billion or nearly 61% to an all-time high of $3.87 billion since tagging a local low on Oct. 17.

The move has solidified USDe as the fourth-largest stablecoin by capitalization, beating out First Digital USD (FDUSD) with $2.19 billion, and closing in on Sky’s DAI token with $4.25 billion — although Sky recently launched a second stablecoin in USDS, which adds $1 billion to the capitalization of the project’s stablecoin ecosystem.

The rising demand for USDe coincides with the yields accrued by holders rising amid the recent bullish momentum in the broader digital asset markets.

USDe’s yield is sourced through a combination of Ether staking rewards hedged against short funding rates for ETH. With funding rates for short positions recently exceeding 38%, Ethena estimates that its 310,290 Savings USDe (sUSDe) holders are currently earning an annual percentage yield (APY) of 25%.

USDe is also enjoying a spate of integrations with centralized exchanges, making the token available to a broader and less DeFi-savvy crypto audience.

On Nov. 22, Deribit launched support for USDe as margin collateral, allowing holders to earn yield while using the asset as collateral for leverage trading. The move follows integrations on Gate on Nov. 14, and Bitget in June.

Yield-bearing stablecoins proliferate

Ethena’s popularity has helped to spur increasing competition among stablecoin issuers to design tokens offering high yields to holders.

On Nov. 20, Curve launched Savings crvUSD (scrvUSD), allowing users to deposit the crvUSD token into a vault to earn yield. On Nov. 23, scrvUSD’s market cap exceeded 10 million, with the token currently offering a 16.4% return to holders. On Nov. 5, Curve’s governance greenlit a proposal to divert 10% of crvUSD revenue to scrvUSD holders to bolster yields and bootstrap adoption.

On Nov. 18, Binance teased an upcoming stablecoin claiming to offer a 19.5% APY to holders. Binance users will be able to access the token in limited quantities based on their VIP score with the platform.