Ethena’s USDe Joins the Ranks of Top Stablecoins

USDe by Ethena Labs has entered the ranks of the top three stablecoins. Since mid-July, its market capitalization has surged by 75%, reaching $9.5 billion.

In terms of supply, USDe trails behind Tether’s USDT ($163.8 billion) and Circle’s USDC ($64 billion). The total market capitalization of all stablecoins has been growing for seven consecutive months, nearing $275 billion.

This trend coincides with an increase in the total value locked in Ethena, which stands at approximately $9.4 billion. This places the project seventh in the DeFi sector.

The growth in USDe supply has also impacted the price of ENA, Ethena’s governance token. Over the past month, it has risen by 130.8% and is currently trading at $0.58.

Reasons for Growth

The demand for the asset may have been driven by its high yield. USDe holders receive a floating rate of 10% to 19% APY. 

At the time of writing, the annual percentage yield of the staked asset stands at 10.86%. With US inflation at 2.7%, the real APY of the asset is 8.16%. This makes the asset attractive compared to less favorable conditions in the traditional financial sector.

Brandon Kay, an analyst at The Block Research, suggested that the GENIUS Act in the US contributed to the increased demand for the coin. He added that Ethena’s subsequent partnership with Anchorage Digital allowed USDe to be issued in the US market in compliance with new regulations.

Anthony Yim, co-founder of the analytics firm Artemis, called yield-bearing stablecoins “unexpected winners” in the post-GENIUS Act era.

Surprising winners in a post-GENIUS era — yield bearing stablecoin supply up a TON despite GENIUS disallowing them in the US@ethena_labs‘s USDe alone added 2.7B in supply since GENIUS (Jul 18) pic.twitter.com/vDfBKe4fk3

— Anthony Yim (@anthonyyim) August 4, 2025

Julio Moreno, head of research at CryptoQuant, explained that investors are turning to stablecoins like USDe and USDS, as they offer returns through staking in their own protocols.

Moreover, according to the expert, if the trend continues, the stablecoin market could approach $300 billion by the end of the year.

However, Temujin Lui, CEO of Wanchain, believes that the growth of stablecoins could be hindered by efforts from TradFi participants in the field of tokenization. He noted that tokenization “allows money market funds to adopt the speed and flexibility that previously made stablecoins unique, without compromising security and regulatory oversight.”

Criticism

Members of the crypto community compared USDe to the collapsed UST from Terra. However, the asset from Ethena is fully backed by crypto assets and hedging positions, unlike the algorithmic UST. The issuer has also diversified the collateral by adding Bitcoin and USDT, and engaged third-party auditors.

Back in March, German authorities halted the sale of USDe, citing “serious deficiencies” and non-compliance with MiCA requirements. In April, Ethena Labs announced the cessation of operations in Germany.