Ethena's USDe stablecoin has secured the third position by market capitalization among digital dollars, surpassing DAI and USDS. This significant advancement follows growing adoption and achievement of key governance milestones.
USDe's Rise in the Stablecoin Market
USDe's market capitalization exceeded $12.4 billion, resulting from approximately a 42% increase in its circulating supply over a month. It now ranks third, behind Tether (USDT) and Circle (USDC).
Ethena's Critical Milestones
In November 2024, Ethena Labs approved its 'fee switch' proposal, allowing redistribution of a portion of the protocol's revenue to ENA holders. Achieving three key milestones is necessary before revenue redistribution can commence: surpassing $6 billion in USDe supply, accumulating at least $250 million in protocol revenue, and securing listings for USDe on four of the top five centralized exchanges.
Unique Strategy of USDe
Unlike traditional stablecoins such as USDT and USDC, which rely on bank reserves, USDe employs a delta-neutral strategy to maintain its peg. It hedges user deposits with short positions on centralized exchanges, helping it maintain stability and attract DeFi users.
The rapid rise of USDe and Ethena's achievements provide hope for further development and new opportunities for ENA token holders. However, the strategy of using derivatives raises questions about the associated risks that need to be considered.
