Ethena’s DeFi Dominance Erodes as $8.3 Billion USDe Redeemed
Ethena’s total value locked (TVL) has plummeted by more than 50%, collapsing from $14.305 billion to $6.551 billion following October’s market turmoil. The synthetic dollar protocol saw approximately $8.3 billion in net redemptions of its USDe stablecoin after a severe liquidation event on October 10, triggering a broader capital flight from its ecosystem.
USDe’s market capitalization cratered from $14.7 billion to $6.4 billion in under two months, marking one of the most dramatic contractions among major stablecoin projects. The exodus reflects eroding confidence in yield-linked synthetic structures as volatility rattled decentralized finance.
On-chain data reveals the protocol now ranks among DeFi’s hardest-hit casualties after Leveraged positions unwound during October’s sell-off. The rapid deleveraging exposed structural vulnerabilities in collateral mechanisms tied to derivatives markets.
