Ethena-USDe sees significant rise, Decentralized Finance ecosystem welcomes new vitality

Recently, the issuance of USDe has shown an explosive rise, soaring 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 market sentiment after Bitcoin broke its historical high, which has driven up the funding rates and subsequently increased the staking yield of USDe. Although there has been a slight pullback recently, the annualized yield of USDe remains at a high level of around 25%.

Meanwhile, a well-known decentralized autonomous organization has also become a beneficiary of this rise. The organization's daily revenue has increased by more than 200% compared to a month ago, reaching a historical high. This rise is closely linked to the prosperity of the Ethena ecosystem. On one hand, the high staking yield of USDe has stimulated the lending demand for sUSDe and PT assets. On a certain lending platform, the scale of borrowing stablecoins with sUSDe and PT as collateral has reached 570 million USD, with a borrowing utilization rate exceeding 80% and an annualized deposit yield of up to 12%. In the past month, the incremental loans issued through this platform have exceeded 300 million USD.

In addition, the borrowing demand for sUSDe and PT has indirectly pushed up the usage rate of stablecoins in other channels. The stablecoin deposit interest rate of a certain lending platform has reached 8.5%. Data shows that the total amount of stablecoin loans issued to the two major lending platforms by the decentralized autonomous organization through specific modules has approached 2 billion USD, accounting for nearly 40% of its asset side. These two businesses alone have generated an annualized income of 203 million USD for the organization, equivalent to a daily contribution of 550,000 USD, accounting for 54% of its total annualized income.

The prosperity of the Ethena ecosystem has become a core driving force behind the revival of Decentralized Finance. The optimism brought by Bitcoin's new highs has boosted funding rates, thereby affecting the staking yield of USDe. A certain decentralized autonomous organization has become an important support for the USDe ecosystem due to its complete capital flow chain and functions similar to a central bank. At the same time, several lending platforms have played the role of "lubricants" in this process. These three components form the core engine of rise, while other DeFi protocols, such as a leading lending platform and a large decentralized exchange, have also benefited from the rise of USDe to varying degrees.

It is worth noting that in this rise spiral, almost every participant benefits. Leverage miners and lenders of USDe can obtain high but volatile yields, stablecoin deposit users enjoy relatively stable high returns, arbitrageurs gain interest spreads by staking various assets, while advanced players achieve excess returns through combinations of DeFi protocols. At the same time, each protocol also reaps higher total locked value, income, and token prices.

However, whether this growth model can be sustained hinges on whether the interest margin between USDe and a certain stablecoin will exist in the long term. Influencing factors include: the sustainability of bullish market sentiment, whether Ethena can enhance APY distribution efficiency through economic model optimization, and changes in the competitive landscape of the market.

As the rise continues, the market has raised concerns about the security of specific modules of a certain decentralized autonomous organization. Some believe that this model is similar to "unanchored money printing." However, from a balance sheet perspective, the stablecoins minted by this module are actually collateralized by specific assets, ultimately forming "long and short synthetic asset positions with an LTV ratio exceeding 110%."

Nonetheless, this model does indeed bring some increased risks:

1. A high proportion of this module may cause a certain stablecoin to once again become a "shadow stablecoin".
2. The operational risks, contract risks, and custody risks of Ethena may be transmitted to this stablecoin, and the intermediate links may further increase the risks.
3. It may reduce the overall collateralization rate of the stablecoin.

Overall, the rapid rise of Ethena-USDe has injected new vitality into the DeFi ecosystem, but it has also brought new risks and challenges. Market participants need to closely monitor the development of this ecosystem and weigh opportunities against risks.