USDe Supply Hits $12 Billion as DeFi Loops Drive Growth

- Ethena's USDe supply hits $12 billion on August 25, 2025. - Growth driven by leveraged yield strategies on Pendle and Aave. 2025-08-29 Ethena’s yield-bearing stablecoin, USDe, reached a circulating supply of $12 billion on August 25, 2025, marking a significant milestone in the competitive stablecoin sector. On August 29, *The Block* reported that dynamic strategies on decentralized finance (DeFi) platforms fueled this rapid growth. These strategies involve leveraged yield-lending loops on Pendle and Aave. USDe sets itself apart from other stablecoins like Tether (USDT) and USD Coin (USDC) by offering an Annual Percentage Yield (APY) of 9%-11%. A delta-neutral hedging strategy underpins this yield, whereby Ethena collateralizes positions in Ethereum (ETH) and Bitcoin (BTC) while maintaining short futures positions. This approach allows Ethena to exploit positive funding rates and mitigate directional market risk. The surge in USDe supply has been driven by users implementing advanced DeFi strategies. A key mechanism involves staking USDe to mint sUSDe, which users then tokenize via Pendle and use as collateral on Aave to borrow additional USDe. This recursive borrowing and staking model amplifies USDe’s presence and drives significant token locking on both platforms. This substantial growth demonstrates strong market interest in yield-bearing assets, particularly during favorable market conditions. However, the sustainability of USDe’s leveraged strategies depends on persistent positive funding rates. As a result, adverse market conditions could jeopardize these leveraged positions, which raises questions about long-term stability. As of August 29, 2025, at 16:14 UTC, Ethena USDe (USDe) was trading at $1.001, reflecting a -0.016% change over the past 24 hours. By comparison, Ethereum (ETH) was trading at $4,334.919 (-4.061%), Bitcoin (BTC) at $108,678.88 (-3.746%), and Aave (AAVE) at $312.196 (-1.445%). Meanwhile, Tether (USDT) and Dai (DAI) continued to trade at $1.00 with negligible fluctuations. This market data underscores USDe's expanding footprint amidst the broader market's volatility.