Ethena's TVL Sets New Records

DeFiLlama data shows that Ethena's TVL has exceeded $5 billion, currently at $5.203b, setting a new historical high. The market capitalization of USDe has reached $5.019 billion, surpassing DAI ($4.7 billion) to become the third largest stablecoin by market cap. This indicates that USDe, as Ethena's core stablecoin product, is gaining increasing market recognition and capital support.

The Appeal of Stable Assets: USDe's Unique Mechanism


As a rising stable asset, how does USDe attract such a high market cap? I believe this is mainly due to its unique mechanism and its strong alignment with market demand:

  1. Capital Efficiency and Scalability:
    USDe achieves this through hedging the delta (price changes) of its backing assets. This strategy allows USDe to be 'collateralized' at a 1:1 ratio while ensuring capital efficiency, greatly enhancing its scalability. By utilizing derivatives markets (such as perpetual contracts), USDe can meet market demand for stable assets without relying on traditional banking systems. Therefore, USDe's collateral mechanism allows it to scale quickly, adapt to the growing market demand, while maintaining efficient capital operations.

  2. Stability:
    The stability of USDe comes from the delta hedging of its backing assets (such as ETH, stETH, BTC, and liquidity stablecoins). Whenever USDe is minted, the backing assets are immediately hedged with derivatives to ensure the synthetic dollar value of USDe remains stable. This mechanism effectively reduces the impact of market volatility on USDe's value, ensuring stability even in cases of significant fluctuations in major assets (such as ETH, BTC, etc.).

  3. Censorship Resistance and Decentralization:
    USDe stores its collateral assets on a trustless blockchain through a fully decentralized mechanism, avoiding risks associated with reliance on traditional financial systems (such as banks). This means USDe is not controlled by traditional financial institutions and regulations, ensuring its censorship resistance. All assets and transactions are publicly transparent on the blockchain and can be audited 24/7, greatly enhancing user trust. This decentralization and transparency is an advantage that traditional stablecoins find hard to match.

  4. Core Currency Asset of the Blockchain:
    The design goal of USDe is to become a core currency asset in the crypto ecosystem, supporting not only decentralized transactions and applications but also being compatible with centralized cryptocurrency trading platforms. This means USDe is applicable not only in the DeFi ecosystem but can also enter traditional centralized exchanges and liquidity pools, attracting a broader user base and capital inflow.

USDe's efficient mechanism helps it stand out in the market, attracting professional investors and institutions like Hayes.


The Importance of High-Performance Infrastructure


Recently, the native token HYPE of Hyperliquid saw a dramatic price surge, reflecting the strong market demand for high-performance infrastructure. As a blockchain focused on high performance, Hyperliquid's innovative design philosophy—integrating perpetual contract exchanges (Perp DEX) with L1—allows it to stand out in the competitive crypto market. It not only provides users with a seamless, efficient decentralized trading experience but also enhances the project's profitability and sustainability by integrating revenue streams from exchanges and the L1 network. The price surge of the HYPE token is a direct reflection of the market's strong demand for this innovative model and high-performance infrastructure.

The market rewards innovative projects that enhance efficiency and reduce transaction costs, and Ethena is a standout in this regard. Ethena, through its unique USDe stablecoin and efficient hedging mechanism, has created a financial product that is competitive in both decentralized and centralized markets. As TVL continues to rise and demand for decentralized financial infrastructure increases, Ethena's innovative model also brings it potential similar to that of Hyperliquid.

Why USDe is the Next 'Hit' Stable Asset

The rising demand for transparency and decentralization in the DeFi space will also drive the continuous increase in USDe's market capitalization, as the market will have more demand for stable assets that are more stable and censorship-resistant. USDe's hedging mechanism allows for efficient use of capital, avoiding over-collateralization and thus providing good scalability. This enables USDe to meet the demands of large-scale capital flows and support large-scale market participants. Through the hedging mechanism, USDe can maintain stability amidst market fluctuations, avoiding the excessive volatility issues that traditional stablecoins may encounter.

Additionally, sUSDe, as a derivative asset of USDe, can also support USDe in becoming the next 'hit' stable asset. sUSDe offers an innovative staking and rewards mechanism, allowing users holding USDe to earn additional returns. sUSDe adopts the ERC4626 standard, enabling seamless integration with other DeFi platforms, enhancing the liquidity and market participation of USDe in the DeFi space. sUSDe is not only a derivative asset of USDe but is also designed as an 'Internet Bond.' This bond can provide users with stable and predictable returns.

ENA

Currently, the entire crypto market, especially the trends of Bitcoin and Ethereum, is still in relatively important technical positions. Bitcoin has just surpassed its previous high, but Ethereum has not yet broken its historical peak. Against this backdrop, the entire altcoin market is still in a waiting phase. Therefore, as market sentiment heats up further, particularly driven by major crypto assets like Bitcoin and Ethereum, ENA's price still has significant room for growth.

From historical price trends, although ENA has seen significant increases recently, its price has not yet surpassed its historical peak, which is one reason why many speculate that ENA's price still has room for further increases. Additionally, as Ethena's native token, ENA's rise will benefit from the expansion and increased use cases of core products like USDe in the market. As the market gradually recognizes the value of decentralized stablecoins and Ethena continues to attract capital and ecosystem support, ENA is likely to reach new highs.