Ethena’s USDe Contracts as Dollar Stablecoins Hit Supply Milestones

USDe, Ethena’s synthetic-dollar stablecoin, has seen a sharp fall in its monthly supply as most of its counterparts attracted billions in inflows. The token also registered declines on some of its other metrics, including token redemption. Notably, the general stablecoin market appears to be experiencing meteoric growth at this time 

Are USDe Users Selling Their Stablecoin Holdings?

From a market capitalization of $9.3 billion on November 1 to $7.1 billion on November 30, USDe may just have had one of its sharpest monthly contractions yet. 

Noteworthy, this decline has been ongoing for the last few months. In addition to this massive dip, it recorded roughly $2.2 billion in redemptions. This corresponds with a 24% decline in supply in November, according to Coingecko data. 

For context, USDe is a synthetic stablecoin launched by Ethena and is designed to maintain a peg to the US dollar. 

It achieved this feat through trading strategies with crypto and futures contracts rather than holding the actual dollars. The decline in USDe outflows is an indication that users could be swapping USDe on the open market or withdrawing from pools. 

This is likely as holders could be unwinding their positions on Decentralized Applications (DApps).

PayPal’s PYUSD Records $3.8 Billion in Market Cap

While USDe is faced with this setback, fiat-backed stablecoins like USDT USDT $1.00 24h volatility: 0.0% Market cap: $184.71 B Vol. 24h: $114.71 B , USDC USDC $1.00 24h volatility: 0.0% Market cap: $77.84 B Vol. 24h: $15.86 B , and PYUSD are recording inflows running into the tune of several billions. 

For instance, PayPal’s PYUSD could boast of only $1.2 billion in market cap in September. However, this metric has seen an exponential rise to over $3.8 billion, according to DefiLlama. 

PayPal's PYUSD has grown from $1.2B market cap in September to over $3.8B today.

Track over 300 stablecoins on DefiLlama. pic.twitter.com/leBEixDhQ6

— DefiLlama.com (@DefiLlama) December 3, 2025

PYUSD can attribute this progress to the introduction of a 3.7% yield for US users. To earn this annual yield, all users have to do is simply hold their PYUSD in PayPal or Venmo wallets. 

They do not need to lock up their funds or move them elsewhere to receive the benefit. At the time, PayPal had hoped that this integration would drive adoption of the stablecoin.

Moreso, the entire stablecoin market has a market cap of $311 billion, largely dominated by USD-backed tokens. This category alone captures about $303 billion of the total stablecoin valuation. 

In September, USDe alone boasted of 4.5% of the global stablecoin market with $14.4 billion market cap. This was around the time when Kraken exchange announced the listing of the stablecoin.

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