Ethena Labs, the DeFi protocol just crossed a new milestone. The protocol has gained $500 million revenue primarily from its synthetic stablecoin. This surge is part of a broader trend as synthetic stablecoins are gaining considerable market share.Ethena Labs revealed that protocol revenue reached $13.4 million in the past week alone, while the USDe supply hit a new all-time high of $11.7 billion.
A spokesperson for Ethena attributed this growth to strong inflows into USDe and favorable market conditions. Also, the protocol has boosted returns from its delta-neutral hedging reserve model.
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The stablecoin market jumped 4% in August, rising to $277.8 billion. Other synthetic stablecoins are also experiencing significant momentum. Sky Dollar (USDS), an updated version of DAI, has seen its market cap increase by 14%. Similarly, Falcon USD (USDf), a synthetic dollar from Falcon Finance, has jumped 89.4% in market cap. Synthetic stablecoins, not backed by physical assets, offer lower transaction costs due to their structure. However, they carry risks of instability and depegging, potentially leading to substantial losses for investors.
The uptick is supported by a more favorable regulatory environment in the United States, particularly with the recent signing of the GENIUS Act by President Donald Trump. During the Wyoming Blockchain Symposium 2025, U.S. Federal Reserve Governor Christopher Waller highlighted the potential of the GENIUS Stablecoin Act to unlock the full capabilities of stablecoins and strengthen the global influence of the U.S. dollar.
Meanwhile, a major policy shift may be on the horizon in China, with reports suggesting that the country is considering allowing Chinese yuan-backed stablecoins. This would be a significant move that could reshape the global stablecoin landscape.
