Ethena Expands USDe Into Aave As ‘Asset Matures’

Ethena Labs, issuer of the fourth-largest stablecoin by market capitalization, continues to broaden USDe’s reach in Decentralized Finance (DeFi), and has integrated with the industry’s largest lending platform, Aave.

According to Ethena’s team, users can now deposit USDe and loop their position with other stablecoins on Aave, and deposit stETH, weETH, ETH and WBTC on Aave to borrow stablecoins into Ethena USDe or sUSDe. Users will also unlock long delta exposure to tokens such as ETH while providing liquidity into Ethena.

Additionally users will be able to earn Sats for posting USDe collateral (20x multiplier), sUSDe collateral (10x, although it needs to be confirmed via a governance vote), stETH, ETH, rETH, and weETH collateral to borrow GHO into USDe (10x) among other bonuses.

‘More Mature’

“After a quarter, the asset is more mature and has been deemed acceptable to be onboarded with caps and inside isolation mode,” Marc Zeller of the Aave Chan Initiative said. He told The Defiant there was no pushback from the community “at all,” and that risk parameters are sound.

His words come as a surprise, given Zeller authored a proposal in Aave’s governance forum to revoke the collateral status of DAI on Aave, when MakerDAO caused DeFi community members to clash over adding USDe as collateral in early April.

Climbed the Ranks

The integration is yet another power move by Ethena. Despite triggering some short-term PTSD by how its yield-bearing architecture works–through a unique blend of native staking returns, and average funding paid to shorts–users have been flocking to the protocol and its stablecoin USDe.

USDe has quickly climbed the ranks and now sits in fourth place among all stablecoins by market capitalization. It has grown 42% in the past 30 days, rising from $2.2 billion to $3.2 billion.

By joining Aave, Ethena unlocks the largest lending ecosystem in the industry. Aave holds $13.2 billion in total value locked (TVL), which accounts for 35% of the sector, according to DefiLlama.

The Ethena team explained today on X that the current borrow rates on USDC for Aave “compare favorably” to the borrow costs observed on the MorphoLabs USDe and sUSDe vaults and may provide a cheaper option to access levered exposure.

Borrow rates for USDC on Aave sits at 12.8%, whereas USDe on Morpho is currently at 15.4%.