Ethena has emerged as a leader in the decentralized application (DApp) space, setting a remarkable milestone with over $6.8 million in daily cumulative revenue in the past week, as revealed by Seraphim Czecker, the Head of Growth at Ethena Labs, on a March 8 X post.
This achievement places Ethena just behind the blockchains Tron and Ethereum, which recorded daily revenues of $38.6 million and $182.5 million respectively over the same period.
The platform is gaining attention for offering a significant 67.2% yield on its USDe synthetic dollar, attracting over 350,000 users.
The value of USDe has seen a substantial increase, with its market cap surging by 43% in the last week and an impressive 409% over the past month, reaching $840 million according to data from DefiLlama.
Ethena Labs introduced its USDe synthetic dollar to the public mainnet on February 19, amidst concerns from investors given its high 27.6% annual percentage yield (APY) — considerably higher than rates previously seen in the industry.
This launch came after the notable collapse of the TerraUSD (UST) algorithmic stablecoin and its associated Anchor Protocol, which had offered a 20% yield before its downfall in May 2022.
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Addressing concerns about the high yield of USDe, Guy Young, the founder of Ethena Labs, in a Cointelegraph interview on February 22, highlighted the industry’s evolution post-Terra’s collapse.
Young emphasized the importance of skepticism and due diligence, stating, “The immediate reference to Terra Luna was just a knee-jerk reaction which people had to the yield itself […] It’s right that people responded in the way that they have because we should be responding with skepticism and trying to work out whether [protocols] are fragile in the beginning rather than letting them get too big if they are.”
He further differentiated USDe from the failed Anchor protocol by pointing out that USDe’s yield generation mechanisms, including staking returns and shorting Ether perpetual future contracts, are publicly verifiable.
The development of Ethena’s synthetic dollar has been supported by substantial funding, with a recent $14 million investment round backed by Dragonfly.
This followed an earlier $6 million investment round in 2023, featuring prominent backers such as Binance Labs, Gemini, Bybit, Mirana Ventures, OKX Ventures, and Deribit, showcasing strong investor confidence in the platform’s potential and innovation in the decentralized finance (DeFi) space.
