Ethena’s USDe Loses 24% in November as Fiat-Backed Stablecoins Add Billions
Ethena’s synthetic stablecoin USDe contracted sharply in November, losing roughly $2.2 billion (24%) of supply as traders redeemed or sold the token. CoinGecko data shows USDe’s market capitalization fell from $9.3 billion on Nov. 1 to about $7.1 billion on Nov. 30, and to $6.9–$7.1 billion at time of reporting, dropping USDe from the third to the fourth largest stablecoin. The outflows follow an October depeg on Binance — a brief plunge to $0.65 attributed by Ethena founder Guy Young to a Binance-specific oracle problem; mint/redemption mechanics reportedly functioned and about $2 billion was redeemed across DeFi. In contrast, fiat-backed dollar stablecoins saw net inflows of roughly $3.2 billion in November: Tether (USDT) increased by ~$1.3B to $184.6B, Circle’s USDC rose by ~$600M to $76.5B, PayPal’s PYUSD jumped by $1B to $3.8B (35% month-on-month) and Ripple’s RLUSD surpassed $1B, rising from $960M to $1.26B. Total stablecoin market cap was around $311B, with fiat-backed coins making up about $303B. Key implications for traders: heightened redemptions in synthetic stablecoins may signal preference shifts toward fiat-backed reserves and pose liquidity and peg-risk considerations for DeFi positions that use USDe as collateral or settlement. Primary keywords: USDe, synthetic stablecoin, fiat-backed stablecoins, USDT, USDC, PYUSD.
Bearish
USDe’s large monthly outflows (24%, ~$2.2B) and its earlier Binance depeg indicate elevated peg and liquidity risk for synthetic stablecoins. Traders shifting capital into fiat-backed reserves (USDT, USDC, PYUSD, RLUSD) suggest reduced confidence in algorithmic/synthetic designs. Short-term impact: increased volatility and potential forced deleveraging for DeFi users holding USDe as collateral, pressure on derivatives and lending markets that reference USDe, and possible cascading selling into fiat-backed stablecoins. Medium-to-long-term impact: credibility and market-share erosion for synthetic stablecoins unless protocol fixes and transparency restore confidence; beneficiaries include fiat-backed issuers, which may see continued inflows and wider adoption in trading pairs and On/Off-ramps. Historical parallels: algorithmic/synthetic stablecoin runs (e.g., UST/LUNA collapse, past depegs) led to rapid valuation declines and contagion in DeFi; while USDe’s mechanics differ, the market reaction — flight to fiat-backed reserves — is consistent with prior stability-driven reallocations. Traders should reduce counterparty and peg exposure to USDe, monitor on-chain redemptions, liquidity pool depths, and centralized-exchange oracle mechanics; consider hedges or shifting collateral to fiat-backed stablecoins to mitigate short-term liquidity risk.