Ethena Labs (USDe) pushes Circle and Tether as stablecoin race heats up

Ethena Labs’ USDe continues to make moves to position itself as a logical alternative to USDC and USDT as the stablecoin competition heats up. The latest in a series of progressive moves Ethena Labs has made regarding USDe involves Bybit, one of the largest exchanges in the industry right now. 

According to a tweet from Bybit, the exchange’s users can now mint, redeem, and earn USDe on Bybit On-chain earn, an ongoing campaign. Ethena Labs also shared a tweet to commemorate the partnership, explaining that the new development allows Bybit users to mint and redeem USDe natively without leaving the platform.

USDe Mint/Redeem now live on Bybit with @ethena_labs!

Mint, redeem, and earn USDe—exclusively on Bybit On-Chain Earn! 🚀

Seamless. Effortless. Limitless.

Mint Now: https://t.co/rZFJQhxilw pic.twitter.com/bZ78AyI83l

— Bybit (@Bybit_Official) March 4, 2025

Bybit is a partner in distributing Ethena Labs’ USDe

According to the tweet from Ethena Labs regarding the new Bybit partnership, there is over $3.5bn worth of USDT & USDC on Bybit, and this functionality will help users of all sizes to seamlessly move between USDe and other stablecoins at fixed costs. This is expected to help support deeper liquidity on the exchange.

According to Ethena Labs, “this feature perfectly complements Bybit USDe holders’ ability to earn rewards for holding USDe as well as using it as derivatives margin collateral.”

The tweet ended with Ethena Labs highlighting how committed it and Bybit are to creating innovative user experiences and further improving users’ capital efficiency.

With the Bybit integration, USDe gains a larger user base, making it an even bigger contender in the stablecoin race, which is getting more serious as the crypto industry hedges closer to mass adoption.

Aside from the partnership with Bybit, Ethena’s USDe has also been enjoying recent popularity in the industry as several other entities seem bullish on it.

Last month, MEXC cryptocurrency exchange invested in Ethena as part of a broader push to promote stablecoin development and adoption. MEXC made the announcement on February 26, claiming it allocated $20 million to Ethena’s synthetic US dollar, USDe, and $16 million to developer Ethena Labs.

Like Bybit, the exchange also launched a $1 million reward pool to encourage participation in USDe trading and staking. It is not hard to see why MEXC made such a huge commitment.

The exchange’s chief operating officer, Tracy Jin, believes stablecoins have a “pivotal role” to play in promoting cryptocurrency usage and adoption.

USDe has a circulating supply of nearly $5.4 billion, making it the third-largest stablecoin by market capitalization.

More good news for Ethena Labs’ USDe

MEXC’s investment followed Ethena reportedly closing a $100-million funding round backed by major investors, including the famed Franklin Templeton.

According to a Bloomberg report, the fundraising was financed via a private sale of Ethena’s governance token, ENA and the funds will be used to build a blockchain and token for the traditional finance industry.

According to Ethena Labs’ founder, Guy Young in a January blog post, Ethena has plans to deploy iUSDe, a token with the sole purpose of regulating financial institutions.

This token differs from USDe in that it is designed to “export” the benefits of USDe to traditional finance institutions. In short, its purpose is to bridge crypto yields with regulated financial markets.

iUSDe shares the same delta-neutral stability mechanism as USDe which means it maintains its peg by collateralizing stablecoins and taking futures positions with large open interest. However, it also includes “transfer restrictions” to comply with TradFi regulatory requirements.

It is essentially a wrapped version of sUSDe created specifically for institutional use. So, while USDe is available for regular users, iUSDe will be restricted to approved institutional players via partnerships with TradFi distribution channels.

As far as yield is concerned, it will offer a similar yield to sUSDe, which is around 10-20%. However, it’s being touted as a “savings token” for institutions to access without direct blockchain exposure.

Ethena Labs is in the stablecoin competition

Ethena Labs’ USDe stands out from other stablecoins, like Tether’s USDT and Circle’s USDC because it uses a hedging strategy collateralized by cryptocurrencies. USDe holders are also offered a 9% yield by Ethena Labs.

Despite the largest exchange hack in history occurring in the last week, the weekly distribution for sUSDe has been finalised at ~9% APY

sUSDe: ~9%
sUSDS: ~7%
aUSDC: ~5%
aUSDT: ~4%
BFUSD: ~3%

Just use Ethenahttps://t.co/GiGIdkvGv3 pic.twitter.com/7MxsCLXIsW

— Ethena Labs (@ethena_labs) February 27, 2025

Some experts see USDe as a potential safe haven during periods of great volatility in the wider crypto market. One of them is Arthur Hayes, chief investment officer of Maelstrom.

In fact, Hayes likes it so much, he has revealed that his digital asset fund has raised its exposure to USDe “to record levels.” USDe is already popular, but now that yield-bearing stablecoins appear to be gaining ground, it is expected to become even more attractive.

Back in February, the US Securities and Exchange Commission (SEC) approved the country’s first yield-bearing stablecoin security from Figure Markets. The forthcoming YLDS stablecoin will allow users to earn interest payments on their holdings and experts think it signals the regulator’s intent to accommodate the rapidly growing stablecoin market.

According to Figure Markets CEO Mike Cagney the application was submitted to the SEC more than one year ago. However it was most likely not taken seriously by the previous SEC administration as it eliminates the need for traditional finance.

“If I can hold this [stablecoin], if I can self-custody this, if it pays me interest, and I can actually use it to transact, what do I need a bank for?” Cagney said.

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