Ethena Labs' synthetic dollar, USDe, has experienced a substantial increase, reaching a $2 billion market cap in under two months after its launch on Ethereum's mainnet. The stablecoin's market cap has grown by over 147% in the last month according to DefiLlama, making it the fifth largest stablecoin token as classified by CoinGecko.

USDe differs from traditional stablecoins by not holding cash reserves but instead utilizing derivative hedging against collateral positions, denominated in assets like Bitcoin, Ethereum, ETH liquid staking tokens, and Tether. With a $2 billion supply and market cap, Ethena's synthetic dollar has surpassed other established stablecoin options like USDT, USDC, DAI, and FDUSD.

Industry experts have raised concerns about potential similarities between Ethena's USDe and Luna UST, Terra's algorithmic stablecoin that experienced a significant collapse in May 2022. Developer Andre Cronje and CryptoQuant Founder and CEO Ki Young Ju have questioned whether USDe could pose a similar risk given its backing by assets like Bitcoin.