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Ethena Stablecoin Nears $6 Billion Market Capitalization, Surpasses $250 Million in Revenue
The stablecoin market, currently valued at $212 billion, has been dominated by Tether (USDT) and USDC. However, despite the stronghold held by these two stalwarts, USDE, launched by Ethena Labs in February 2024, has rapidly risen to third place. This synthetic stablecoin utilizes a delta-neutral strategy to maintain its peg with the U.S. dollar, thereby minimizing the impact of crypto collateral volatility.
The rapid growth of USDE can be attributed to its innovative approach and sustainable revenue streams. Backed by a $6 million seed round led by Arthur Hayes, the founder of BitMEX, the stablecoin has grown substantially in less than a year. Offering yields for investors, it reached an all-time high of nearly 56% in March 2024 and currently provides a return of 12.75%.
USDE has surpassed long-standing competitors such as Dai, which was launched by MakerDAO in 2017, and is now approaching a market capitalization of $6 billion while generating more than $250 million in revenue.
In an interview with Unchained Podcast, Guy Young, founder of Ethena Labs, emphasized the key differences between USDE and TerraUSD (UST), which collapsed in 2022 after reaching a $19 billion market capitalization. He stressed that USDE is backed by real collateral, unlike UST, which relied on governance tokens such as Luna.
Young further clarified that Ethena’s approach focuses on securing its stablecoin with verifiable assets, avoiding the vulnerabilities that led to UST’s failure. The combination of this strategy and a delta-neutral mechanism has allowed USDE to outpace its competitors and attract significant investor interest.
By maintaining its peg through innovative techniques and sustainable revenue sources, Ethena has successfully established USDE as a prominent player in the stablecoin market.
Source: coinchapter.com
