Ethena's Synthetic Dollar Achieves Significant Market Milestone
Ethena’s stablecoin ecosystem is gaining momentum, drawing attention across the crypto industry as its synthetic dollar, USDe, climbs global rankings. Data from Santiment and Bybit’s biweekly report shows USDe’s total market capitalization expanding sharply. This growth has pushed USDe to become the third-largest stablecoin by market cap.
The milestone places USDe just behind Tether (USDT) and Circle’s USD Coin (USDC), indicating a significant change in the stablecoin market. Unlike conventional fiat-backed stablecoins, USDe uses a synthetic model that maintains its dollar peg through derivatives trading and hedging. USDe first surpassed Dai (DAI) in late 2024 and firmly held its position in mid-2025. Its market cap has now exceeded $10.5 billion, suggesting growing adoption among both institutional and retail users.
Dual-Token Model and Expanding Partnerships Drive Growth
Ethena has built its strategy around two products, USDe and USDtb, each serving different segments of the crypto economy. USDe offers yield through synthetic exposure, while USDtb functions as a fully asset-backed stablecoin backed by real-world assets.
The dual-token model of the project appeals to both yield seekers and conservative investors looking for stability and compliance. Working with U.S.-regulated custodian Anchorage Digital, Ethena created USDtb, which was introduced on October 14, 2025.
Ethena describes its vision as building “Digital Dollars for the Internet Economy.” It lists key figures showing over 836,000 users across 24 blockchains and more than $13.8 billion in total stablecoin supply.
Collaborations have also been essential to Ethena’s success. A recent milestone came when Binance listed USDe trading pairs, giving the token exposure to millions of global users. Additionally, the listing enabled USDe to be used as collateral on Binance Earn and in futures trading, boosting liquidity and investor access.
Ethena has teamed up with Jupiter, a Solana-based decentralized exchange, to launch JupUSD, a new stablecoin intended to replace USDC, which currently represents about $750 million in Jupiter’s liquidity pools. In order to strengthen Ethena’s position in the Solana ecosystem, the project intends to start with USDtb collateral before incorporating USDe into the system.
Growth, Risks, and Structural Challenges in the Stablecoin Market
Ethena’s flexibility has been one of its strongest advantages. By offering both synthetic and reserve-backed options, the company captures users seeking returns or regulatory stability. Major investment funds have contributed to its treasury, giving Ethena financial strength to support liquidity and ENA token buybacks. USDe adoption continues to rise rapidly. In just six months, the number of holders grew 72.2%, reaching 32,548 non-empty wallets, a sign of sustained user interest.
However, there are substantial risks associated with the model. The stability of the USDe could be threatened by volatility or liquidity shocks because it depends on the derivatives markets to maintain its peg. One significant test occurred on October 10, 2025, when a global market flash crash caused USDe to briefly fall to $0.65. Although USDe quickly recovered, the event sparked renewed debate about the reliability of synthetic stablecoins under market stress.
Ethena’s model is also threatened by regulatory uncertainty. European regulators have already requested operational adjustments, citing concerns over synthetic asset risk. In the United States, the legal path for such structures remains unclear compared to fiat-backed coins such as USDC.
Analysts believe Ethena’s strategy might change DeFi’s liquidity trends. Its growing partnerships, active user base, and innovative model position it as a potential alternative within the stablecoin ecosystem.