Ethena's crypto-native synthetic stablecoin USDe generates earnings through perpetual contract funding rates, but its total lock-up volume (TVL) recently fell by more than 50% from $14.80 billion in October to $7.60 billion, even though actual usage is still growing. The decline highlights the complexity of yield stablecoins in DeFi: leverage can amplify both growth and contraction cycles.
USDe maintains its anchor by holding a spot crypto asset as collateral and establishing a short position in the opposite direction in the perpetual contract market, thereby capturing the funding rate differential as a gain to the holder. The stablecoin currently has an annualized yield of around 5.1%, a significant decrease from the double-digit gains at the beginning of the year, due to the decline in perpetual funding rates in a weaker market environment and reduced leverage demand.
Despite the sharp drop in TVL, the usage trend of USDe has continued to rise, with on-chain transactions exceeding $50 billion last month, indicating that the token retains its use value even as speculative positions are deleveraged.
Despite rising on-chain usage, yield compression still caused USDe TVL to plunge 50%.
2025-11-25 23:32:52
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