Ethena USDe

A synthetic digital dollar stable asset on Ethereum, backed by hedged collateral to maintain a $1 peg while generating yield for holders.

What is Ethena USDe?

Ethena USDe is a crypto-native synthetic stable asset issued by the Ethena protocol on Ethereum, designed to provide a scalable, censorship-resistant alternative to traditional fiat-backed stablecoins like USDT or USDC. Launched in February 2024, USDe maintains its $1 peg through a delta-neutral hedging strategy: it is backed by staked Ethereum (stETH), Bitcoin (BTC), and other digital assets collateralized at over 150% ratios, paired with short perpetual futures positions on centralized and decentralized exchanges to offset price volatility. This mechanism allows USDe to generate yield from staking rewards and funding rates, with an average APY of around 7.54% as of September 2025, distributed without reliance on banking infrastructure. Users can mint USDe by depositing approved collateral via the Ethena app or integrated DEXs, and redeem it for underlying assets at any time.

The protocol’s staked variant, sUSDe, enables holders to earn the full yield on USDe reserves, which include over $500 million in cumulative interest revenue generated since inception. As of September 21, 2025, USDe has a circulating supply exceeding $13 billion, with a market cap of approximately $13 billion, making it the third-largest USD-pegged digital asset behind USDT ($164 billion) and USDC ($63 billion). Ethena’s total value locked (TVL) stands at $14.209 billion, up from $10 billion in August, driven by institutional integrations like custody with Anchorage Digital and trading support on Binance, which listed USDe against USDC and USDT on September 9, 2025. Recent backing from YZi Labs (formerly Binance Labs) has accelerated adoption, with over $30 million in rewards distributed in the past 30 days.

Despite its growth, USDe carries risks including basis risk from funding rate volatility (potentially leading to depegging during prolonged negative rates), smart contract vulnerabilities, and regulatory scrutiny—such as Germany’s BaFin ordering Ethena GmbH to cease operations in April 2025 over MiCA compliance. Ethena mitigates these through third-party attestations, diversified collateral (now including BTC and major stablecoins), and a 2025 roadmap featuring iUSDe for TradFi with 20% APY targets and $10 billion inflow goals via partnerships like FalconX.