USDe & USDS Soar After GENIUS Act via Staking Arbitrage
After the US GENIUS Stablecoin Act banned direct issuer interest, yield-bearing stablecoins USDe and USDS have surged via staking arbitrage. USDe’s supply jumped 70% to $9.49 billion and USDS’s rose 23% to $4.81 billion, totaling $14.3 billion in circulation. Investors stake sUSDe and sUSDS to earn double-digit APY on USDe (10.86% APY, 8.16% real) and 4.75% APY on USDS (2.05% real), outpacing 2.7% US inflation. Ethena’s ENA token rallied nearly 60% as holders seek protocol yields. USDe uses ETH/BTC collateral and perpetual-futures shorts; USDS relies on overcollateralization and liquidity mining. Traders can leverage sUSDe on Aave and compound returns on Pendle Finance, though liquidation risk is high. Overall stablecoin supply grew 23.5% this year to $268 billion and could near $300 billion. Risk factors include smart-contract complexity, DeFi liquidity conditions and regulatory tightening. Staking arbitrage remains a key yield strategy in a low-rate environment.
Bullish
Yield-bearing stablecoins USDe and USDS have seen rapid supply growth and high APY through staking arbitrage, drawing significant investor demand. With yields exceeding inflation and strong protocol adoption (sUSDe, sUSDS), short-term trading volume and staking operations are likely to remain elevated. In the long term, expanding stablecoin supply and continued yield strategy innovation support broader DeFi market growth. Despite smart-contract and regulatory risks, the current environment favors bullish sentiment for these tokens.