The Logic and Impact Behind the Rapid Rise of Ethena-USDe

Recently, the total issuance of USDe has shown an astonishing rise, climbing from 2.4 billion USD to 3.8 billion USD within a month, with a monthly increase of over 58%. This growth is mainly attributed to the bullish sentiment in the market following the new highs in Bitcoin prices, which has driven up the funding rates and subsequently increased the staking yields of USDe. Although there has been a slight pullback recently, the annualized yield of USDe on November 26 still remains at a high level of around 25%.

This growth trend has also brought positive impacts to other related ecosystems. The daily revenue of a certain stablecoin protocol has risen by over 200% compared to a month ago, reaching a historical high. This is mainly due to the high staking rewards of USDe attracting a large amount of lending demand, especially with the surge in demand for loans collateralized by sUSDe and PT assets. On a certain lending platform, the scale of loans collateralized by these assets has reached 570 million USD, with a loan utilization rate exceeding 80% and an annualized deposit yield of 12%. In the past month, the incremental loans issued through this platform have exceeded 300 million USD.

At the same time, the borrowing demand for sUSDe and PT has also indirectly driven up the usage rate of stablecoins in other channels. The stablecoin deposit interest rate of a certain lending protocol has reached 8.5%. Data shows that the total amount of loans issued by a certain stablecoin protocol to two major lending platforms through its specific module is close to 2 billion USD, accounting for nearly 40% of its asset side. Just these two businesses have generated an annualized income of 203 million USD for the protocol, equivalent to 550,000 USD per day, accounting for 54% of its total annualized income.

The growth path of USDe is already clearly visible: the optimistic sentiment brought by Bitcoin's new high has pushed up the funding rate, which in turn affects the staking yield of USDe. A certain stablecoin protocol has become an important supporter of USDe's growth due to its complete liquidity chain and quasi-central bank functions. In this process, a certain lending protocol has played a key intermediary role. These three protocols together form the core engine of growth.

At the same time, other DeFi protocols such as a certain AMM and a certain derivatives protocol have also benefited to varying degrees from the rise of USDe. For example, the stablecoin borrowing utilization rate of a certain lending protocol exceeds 50%, and the total deposits related to USDe are close to 400 million USD. The trading pairs related to USDe occupy an important position in the trading volume rankings on a certain AMM platform and also perform well in the liquidity rankings of a certain derivatives protocol. Related tokens such as CRV, CVX, ENA, and MKR have all achieved a monthly rise of over 50%.

The sustainability of this growth model mainly depends on whether the interest rate spread between USDe and a certain stablecoin can be maintained. Influencing factors include: the sustainability of market bull sentiment, whether Ethena can improve APY distribution efficiency through economic model optimization and market share expansion, and competitive pressure from similar products launched by other exchanges.

With the rise, the market has also raised concerns about the security of specific modules in a certain stablecoin protocol. Although this module allows for the direct dynamic generation of stablecoins without traditional collateral, from a balance sheet perspective, these newly minted stablecoins are actually backed by sDAI as collateral, ultimately converting into synthetic asset positions with over 110% LTV. Therefore, this mechanism does not directly lead to the stablecoin becoming an under-collateralized product, but it does increase some risks:

1. A high proportion of this module may cause this stablecoin to become a "shadow stablecoin" again.
2. The operational risks, contract risks, and custody risks of Ethena may be transmitted to the stablecoin.
3. The existence of intermediaries may further increase risk.
4. May reduce the overall collateralization rate of the stablecoin