Profitable stablecoin Ethena Labs’ USDe has overtaken FDUSD to become the third-largest dollar-pegged token, with a 75% jump in market cap since mid-July pushing the number of coins in circulation to $9,3 billion, according to data from The Block’s dashboard.
The Block analyst Brandon Kay believes that demand for USDe may have accelerated after President Donald Trump signed the GENIUS Act, the first comprehensive U.S. dollar-backed stablecoin law. Ethena’s subsequent custodial partnership with Anchorage Digital to issue a synthetic dollar to U.S. markets as a GENIUS-compliant stablecoin may have helped boost supply.
USDe offers holders a variable rate of return of 10% to 19% per annum, combining the staking and funding rates. This appeals to investors seeking higher returns on investment, as the yields on US Treasuries are less favorable.
Now only USDT Tether with a market cap of $164 billion and USDC Circle with a market cap of $63 billion have a larger market cap than USDe.
Ethena launched USDe in early 2024, and its system is different from UST’s algorithmic mechanism. UST was not fully collateralized and relied on supply and demand algorithms, while USDe is fully collateralized with crypto assets and hedged positions. In addition, Ethena has since partnered with exchanges to expand liquidity, diversified collateral to include assets such as Bitcoin and major stablecoins, including USDT.
The rise in USDe market cap, which began around July 16–17, also coincided with an increase in the total value locked in Ethena. The Ethena protocol is the seventh-largest in decentralized finance, with about $9,4 billion currently locked in contracts, according to defillama.
Data defillama
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