Ethena's yield-bearing stablecoin, USDE, has reached a peak valuation of over $4.12 billion, making it the fourth-largest stablecoin in the market. USDE uses a mix of spot crypto holdings and short positions in margined perpetual contracts to maintain its peg. Holders of USDE benefit from funding rates tied to perpetual contracts and staking rewards on the Ethereum network, with an annual percentage yield (APY) of 29%, higher than most competitors. However, the distribution of USDE is highly concentrated, with the top 100 addresses controlling 99.72% of the supply. While USDE focuses on high-yield opportunities, stablecoins like USDC and USDT are more widely used for transactions. The question remains if USDE can maintain its allure amidst increasing competition and changing market demands.



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