Ethena’s synthetic stablecoin, USDe, has seen a substantial decrease in total value locked (TVL). According to ChainCatcher data, the token’s TVL plummeted from $14.8 billion in October to $7.6 billion, representing a drop of over 50%. This decline is largely attributed to the unwinding of leveraged strategies within DeFi protocols, particularly in lending markets like Aave. The current yield on USDe stands at approximately 5.1%, falling below the borrowing cost of USDC on Aave, which is currently at 5.4%, leading some traders to close out their positions. Despite this decline in TVL, USDe usage has been steadily growing, with on-chain transaction volumes exceeding $50 billion last month. This highlights that even as speculative positions are being unwound, the stablecoin’s overall demand continues to rise.