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    Ethena’s USDe Overtakes DAI as Third Largest Stablecoin, Market Cap Nears $6 Billion

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    Ethena’s stablecoin, USDe, surpassed DAI to become the third largest stablecoin by market capitalization. Despite being launched in February this year, USDe has achieved a market cap of under $6 billion. It has been largely adopted as trading collateral due to its CeDeFi yield strategy and its average returns of around 17.5%. Ethena’s token, ENA, has also increased 5x in value since June. However, it still lags behind USDT and USDC, which boast market caps of $140 billion and $40 billion respectively. The total market for stablecoins now exceeds $200 billion.

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    Ethena, a decentralized finance (DeFi) platform, has seen its stablecoin USDe jump to the third spot in market capitalization rankings, leaving Sky’s stablecoin DAI behind. But big boys USDT and USDC from Tether and USD Coin are still topping the charts with way bigger market caps.

    USDe has a market cap under $6 billion, while USDT is rocking a staggering $140 billion and USDC around $40 billion. On the other hand, DAI’s market cap dipped to just over $4.5 billion, down from a high of $7 billion in 2022. To give some perspective, the whole market for stablecoins is up to over $200 billion.

    USDe made a big splash when it launched in February, quickly attracting billions of dollars from stablecoin owners looking to make mad APRs from Ethena’s cool CeDeFi yield strategy. This strategy is a mix of DeFi contracts and off-the-chart derivatives trading.

    From its start back in February 2024, sUSDe holders (the staked version of USDe) have enjoyed average returns around 17.5%, with the highest going up to 55.9% and lowest around 4.3%. As of December 12, staked USDe (sUSDe for short) is making folks approximately 24% returns annually, which is pretty darn good.

    Ethena allows users to create USDe using stuff like Bitcoin, Ether, liquid staking tokens and other stablecoins. Then it uses complex financial derivatives to manage the inevitable volatility.

    Despite the risks, such as failures by off-the-chain exchanges, keepers and settlement providers, USDe has been widely adopted. For example, in October, the crypto trading desk Wintermute began accepting USDe as trading collateral.

    In other big news, sUSDe teamed up with the DeFi lending giant Aave in June, and it’s now the fastest-growing asset on their platform. All this hustle in 2024 has earned Ethena a whopping $200 million in fees. Recently, Ethena agreed to share some of those earnings with tokenholders.

    Ethena’s own token, ENA, has gone up around 5x in value since June. And let’s not forget, in August, Maker went through a makeover and became Sky. It made some changes to DAI and renamed it USDS, causing some backlash around cybersecurity risks and possible asset freezes.

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