Ethena Founder’s Bombshell: USDe’s Meteoric Rise Fuels Tether’s USDT Printing Spree

Stablecoin drama reaches new heights as Ethena’s founder drops a truth bomb—USDe’s explosive growth isn’t just shaking up DeFi, it’s turbocharging Tether’s USDT minting machine. Who needs monetary policy when you’ve got crypto’s perpetual motion money printer?

Behind the scenes: While ‘decentralized’ purists cheer USDe’s rise, the old guard’s stablecoin monopoly just found its second wind. Nothing unites rivals like the scent of fresh liquidity—even if it smells suspiciously like 2021’s leverage fumes.

The irony? Every ‘algorithmic innovation’ in crypto still ends up feeding the legacy beasts. Tether’s lawyers must be popping champagne—nothing validates a product like competitors driving demand to your doorstep.

Stablecoins can either focus on liquidity or yield

Meanwhile, Young noted that stablecoins cannot optimally offer liquidity while still guaranteeing high yields. According to him, crypto users calling for Tether to pay yield on USDT cannot get it because USDe already exists, and its synergy with USDT benefits Tether. In response to the question of Why doesn’t Tether pay yield? He said:

 “Why would they when traders pay 10-30%+ annualised to long perpetuals with USDT collateral for them instead? Ethena is the conduit through which this is turned into a product for Tether.”

Young added that crypto users would have to pick a stablecoin that gives them liquidity and wide distribution or opt for one with yield, as they cannot get both in the same product. In his view, any crypto product trying to offer both will eventually lose relevance once rates decline. He said:

“The no man land of weak liquidity with risk free yield will become increasingly obsolete and fade into irrelevance as rates decline”

Thus, he emphasized that any stablecoin seeking to compete would have to aim for Tether’s liquidity and high distribution or try to beat Ethena’s returns on savings, as there is no middle ground.

USDT reaches new peak

Meanwhile, the discussion about the synergy between Ethena comes at a time when Tether USDT is reestablishing its dominance in the stablecoin sector. USDT supply recently reached $146 billion for the first time ever.

This milestone shows the sustained growth of the stablecoin despite increased competition from alternatives such as Circle’s USDC and others. USDC is the fastest-growing this year, with more than a 38% increase in supply.

However, USDT remains the biggest stablecoin, with 61% dominance in supply and 70% use rate for all perpetual swaps. Despite regulatory uncertainties around USDT in Europe and the US, the stablecoin continues to grow, especially in emerging economies.

Interestingly, Ethena’s USDe is now the third-biggest stablecoin by market cap, with $4.766 billion, beating out Sky (formerly MakerDAO) DAI and USDS stablecoins. However, it has seen over an 11% decline in supply over the past month.

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