Ethena’s $7.3B move: Is USDe the next center of gravity in DeFi’s stablecoin wars?

Key Takeaways

Ethena’s USDe has attracted $2 billion in inflows this month, pushing its market cap past $7.3 billion. Its yield engine is actively converting USDe demand into sustained ENA buybacks.

Zooming in, July saw a solid risk-on move in crypto. Nearly $200 billion flowed into altcoins, excluding Bitcoin [BTC] and Ethereum [ETH]. 

Ethena [ENA] was a clear standout, ripping 130% on the month and positioning itself as one of the strongest momentum plays in the current market cycle.

But zoom out, ENA’s outperformance isn’t just a short-term impulse move.

According to AMBCrypto, USDe (Ethena’s native yield-bearing stablecoin) is actively driving the rally, making it a narrative you shouldn’t overlook.

Ethena’s yield engine is in full gear

Ethena’s USDe, a dollar-pegged stablecoin, has pulled in $2 billion in inflows this month, pushing its market cap to $7.3 billion, making it the third-largest stablecoin behind USDT and USDC. 

And this growth isn’t random.

Instead, it’s being driven by yield. Ethena is offering 10% APY on sUSDe, its staked version, making it one of the highest risk-adjusted returns across DeFi. 

As illustrated in the chart below, sUSDe yields recently topped 10.29%, directly reflecting Ethena’s on-chain revenue generation. In other words, capital is flowing into USDe not just for stability, but for yield. 

Source: Exponential.Fi

Backing that momentum is solid protocol revenue.

Ethena pulled in $30.85 million in fees over the past 30 days, driven by increased demand from users staking USDe for high APY.

Meanwhile, on the institutional front, Anchorage and Ethena Labs are launching USDtb. It is the first stablecoin to comply with the GENIUS Act.  

Together, these elements highlight how Ethena is scaling on-chain adoption through USDe’s yield engine. But the real question now is, how does this feedback loop translate into sustained demand for ENA?

Ethena converts USDe demand into ENA supply pressure

As AMBCrypto pointed out, USDT and USDC earn yield from the U.S. Treasury holdings and rotate that income into Bitcoin as part of their reserve strategy.

Ethena plays a different game. It doesn’t rely on T-bills.

Instead, it leans into crypto market volatility, capturing Funding Premiums to generate on-chain yield. 

Here’s how it works: When the market is bullish, Bitcoin traders go long on perpetual futures, and they have to pay a funding fee to those taking the opposite side (shorts).

Ethena takes the short side, collecting that funding as yield.

Source: CryptoQuant

Consequently, that yield is then recycled into ENA buybacks, turning USDe growth into real, sustained demand for the native token.

In fact, between the 22nd and 25th of July alone, 83 million ENA (1.3% of the circulating supply) were scooped up across public venues, as part of the Foundation’s ongoing $260 million buyback initiative. 

That’s why ENA’s 130% rally isn’t just market noise. At this rate, the $1 breakout isn’t hype, it’s just where the chart’s headed.