Ethena’s synthetic USDe contracts sharply as dollar-backed stablecoins expand

Ethena’s USDe shed 24% of its supply in November, losing market share as fiat-backed stablecoins like USDT, USDC, PYUSD and RLUSD added billions.

Ethena’s synthetic-dollar stablecoin USDe saw one of its sharpest monthly contractions yet, while fiat-backed stablecoins like USDT, USDC and PYUSD attracted billions in inflows. 

CoinGecko data showed that Ethena’s USDe stablecoin fell from a market capitalization of $9.3 billion on Nov. 1 to a valuation of $7.1 billion on Nov. 30. The token saw roughly $2.2 billion in redemptions, marking a 24% decline in supply in November. 

Ethena’s USDe is a synthetic stablecoin that maintains its dollar peg through trading strategies with crypto and futures contracts rather than holding actual dollars. This means that USDe outflows mean that users are either selling USDe on the open market, withdrawing from pools or unwinding their positions on decentralized applications (DApps).

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