- Ethena's TVL has fallen by more than 50% following large USDe redemptions.
- Yield compression accelerated exits and forced the unwinding of leveraged positions.
Ethereum is facing severe pressure after the total value locked (TVL) on its platform plummeted by more than 50%. Ethena's TVL fell from about $14 billion to about $6-7 billion. This decline highlights how quickly money is being drained and protocols are being put in a more cautious position.
Since October, more than $8 billion in net redemptions have been recorded from USDe, including more than $5 billion in outflows in just one month, Dune said. Moreover, the decline in yields, which was previously considered very attractive for DeFi players, is accelerating their exit.
Images from Dune
When yields that were once in the double digits suddenly drop into the significantly lower range, many strategies that previously seemed reasonable suddenly seem difficult to maintain. At this point, some of the leveraged positions are finally unwound and outflows intensify.
However, not everything will collapse so easily. Meanwhile, USDe is reportedly still holding its value close to $1 while on-chain activity remains strong. Nevertheless, the market remains wary of this situation.
For many market participants, episodes like this highlight that high-yield crypto offerings don't just mean big numbers. There may also be unexpected risks involved. Clearly, Ethena is currently at a stage where careful management is required. Rest may make the situation worse.
Moreover, this situation also serves as a mirror to the DeFi ecosystem, which has recently become increasingly crowded with new stablecoin products. Under current pressures, the ecosystem seems to need to prove its resilience. Therefore, Ethena needs to adopt a more mature approach to prevent a complete loss of trust.
Meanwhile, on November 25, we reported that Ethena had joined the SEAL pilot program to strengthen and validate cryptocurrency operational security standards across a variety of critical workflows, including incident response frameworks, financial controls, multisig procedures, and system security.
Then, on October 18th, we highlighted the launch of Stablecoin-as-a-Service via Conduit. This allows new networks to build custom stablecoins at launch and establishes Ethena as a stablecoin infrastructure provider across DeFi, RWA, and consumer ecosystems.
Further back in early October, Ethena Labs also partnered with UR Global to expand USDe access to 45 countries through its neobank platform, introducing zero off-ramp fees, multi-currency support, and Mastercard debit card access plans for USDe users.
As of this writing, ENA is approximately $0.196bottom 1.94% Over the past 24 hours. 9.82% Last 7 days.
