🌎 Ethena Labs’ USDe Surges to $2 Billion Market Cap

Ethena Labs has seen a significant growth in its synthetic dollar, USDe, with a market cap of $2 billion in less than two months since its launch on Ethereum’s public mainnet. The stablecoin’s market cap has surged over 147% in the last 30 days, making it the fifth largest token in the stablecoin market according to CoinGecko.

USDe stands out from traditional stablecoins by being a yield-bearing crypto that uses derivative hedging against collateral positions denominated in Bitcoin (BTC), Ethereum (ETH), ETH liquid staking tokens, and Tether (USDT) instead of holding cash reserves and equivalents to maintain pegs to fiat currencies like the U.S. dollar.

With a $2 billion supply and market cap, Ethena’s synthetic dollar is making waves in the stablecoin market. It currently ranks ahead of other stablecoin options including USDT, Circle’s USD Coin (USDC), DAI, and First Digital USD (FDUSD).

Industry experts have raised concerns about the similarities between USDe and Terra’s algorithmic stablecoin, UST, which experienced a $60 billion collapse in May 2022. Blockchain developer Andre Cronje and CryptoQuant Founder Ki Young Ju have both questioned whether USDe could face similar risks with its backing assets and potential contagion effects.