By the best way, in line with the information of @tomwanhh and Wu Blockchain, Ethena’s stablecoin, USDe, a yield-bearing stablecoin, has been redeemed for over $700 million in simply 7 days. After the failure of xUSD and deUSD injected concern on the security of yield-based stablecoins, the redemption wave started. This large selloff accounts for about 10-15% of USDe’s circulating market cap, signaling a fast lack of investor confidence in a as soon as high-growth challenge.
Buying and selling Worth of $5.4 B Wiped Out Since October 11
Ethena’s USDe has seen its market capitalization drop by greater than $5.4 billion since October 11, 2025. The coin misplaced an estimated $7 billion in market cap to drop to $1.6- $2 billion. The drop displays a serious lack of investor confidence and liquidity within the decentralized finance (DeFi) markets. Historical past has proven that stablecoins with subtle yield mechanics, corresponding to delta-hedging and staked Ethereum collateral, are prone to spiral quickly as soon as redemption requests are made.
The collapse of xUSD and deUSD had a direct impact in the marketplace stability of USDe. xUSD, issued by Stream Finance, misplaced its $1 peg as a result of halt in redemptions, whereas deUSD, which is pegged to xUSD, collapsed on account of the direct interdependence of their liquidities. These collapses eroded the belief of DeFi buyers, resulting in large withdrawals from different yield stablecoins. Analysts recommend structural weaknesses and poor liquidity administration as the primary causes for the contagion to unfold to Ethena.
Yield Mannequin and Delta Hedging Put to the Check
Ethereum Derivatives Ethena’s USDe is backed by ethereum delta-hedging, which implies Ethena’s USDe is a by-product that’s used to hedge staked Ethereum. In occasions of unstable markets this mannequin can disintegrate if the liquidity turns into unobtainable or the collateral values begin lowering drastically. In accordance with the market observers, redemption pressures have been compounded by the latest turmoil within the Ethereum value. Algorithmic stablecoins have seen stablecoin collapses earlier than (like TerraUSD in 2022), and it’s now beneath scrutiny as as to whether its mannequin is definitely sustainable in the long run for USDe.
Market and Regulatory Implications.
A market-wide concern of yield-bearing stablecoins accounts for the $700 million withdrawal. Platforms which have accepted USDe as collateral are prone to be beneath liquidity stress. As identified within the disclaimer of Wu Blockchain’s article, the regulation on digital currencies in China provides yet one more layer of uncertainty. There’s a probably elevated scrutiny of the excessive yield stablecoin fashions, which, within the close to time period at the least, might additional limit restoration potential.
