📣 New State of the Network: Ethena and the Mechanics of USDe In @coinmetrics latest State of the Network, @TanayVed breaks down Key takeaways: - @Ethena_labs' $USDe has rapidly grown into the third-largest stablecoin, distinguished as a yield-bearing, synthetic dollar backed by crypto collateral and delta-neutral futures positions rather than fiat reserves. - Staked USDe (sUSDe) accrues yield from perpetual funding rates, ETH staking rewards, and liquid stablecoins, with returns tied to exchange funding dynamics and on-chain yields. - USDe primarily serves as a savings and yield instrument. Its integration with DeFi protocols like @Aave and @Pendle_fi enhances capital efficiency and composability, while linking stability to on-chain leverage. - Market stress events like the @Bybit_Official hack and October flash crash tested Ethena’s design and risk management, highlighting how funding, exchange, pricing and liquidity dynamics influence the stability of synthetic dollars like USDe. Read the full report (Link in replies)