Ethena’s synthetic stablecoin, USDe, is making a significant impact on the crypto market, challenging the dominance of established players like USDC and DAI. The platform’s innovative dual-model approach combining yield and stability has driven its rapid ascent to the third largest stablecoin by market capitalization.
Ethena’s strategy involves utilizing derivatives markets for maintaining its dollar peg. This synthetic model, as demonstrated with USDe’s rise to over $12.26 billion in market value, offers an alternative approach to traditional fiat-backed stablecoins.
While USDtb, backed by real-world assets and developed with Anchorage Digital, provides a regulated and reserve-backed solution for risk-averse users. The dual model strategy caters to both DeFi traders seeking yield and institutional clients prioritizing stability. This has led to significant milestones like Binance listing USDe trading pairs, integrating it into its Earn products, and partnering with Jupiter, the Solana-based DEX, to create JupUSD, which replaced $750 million in USDC liquidity.
However, Ethena’s synthetic model presents challenges. Extreme market volatility could destabilize USDe’s peg as seen during the October 10, 2025 crash. Regulatory scrutiny also adds complexity as USDC enjoys established compliance and institutional trust while synthetic models like Ethena’s face tighter oversight in Europe and uncertain reception in the U.S.
The shift towards tokenization is also a significant factor. Citi predicts that by 2030, one-tenth of global market turnover will be conducted using stablecoins and tokenized securities, reflecting how blockchain-based settlement is merging with traditional post-trade infrastructure.