Ethena's 'synthetic dollar' USDe crosses $3 billion supply just four months after launch

Ethena Labs USDe stablecoin, also known as a 'synthetic dollar' which maintains its peg through arbitrage mechanics and a yield-returning cash-and-carry trade, has reached a supply of $3 billion tokens just four months following its public launch in February. 

The stablecoin's supply has grown by $1 billion since April 5, when it last crossed the $2 billion threshold. Now, it's on track to challenge DAI as the largest algorithmic or decentralized stablecoin, though it'll have to add another $2 billion in supply to get there, according to data from The Block. 

In terms of overall stablecoin supply, USDe is in fourth place with a 3.3% share of the overall stablecoin market, far less than market leader Tether's dominant 57% position.

While USDe's rapid rise has reminded some of Terraform Labs's UST stablecoin, the mechanics of each token differ, with USDe's yield coming from a cash-and-carry trade and staking revenue which is then shared with holders. The stablecoin was recently integrated with Bybit, which provides spot trading pairs with Ethereum and Bitcoin. 

USDe also recently began airdropping its governance token, ENA, in April; the token has since hit a market capitalization of $1.3 billion, according to The Block's price page, having fallen from its all-time high price of $1.52 to about $0.91 as of Saturday night.