In a remarkable achievement, USDe, the stablecoin developed by Ethena Labs, has reached $10 billion in total value locked (TVL) in just 500 days, setting a new industry record. This rapid growth has positioned USDe as the fastest-growing stablecoin in history.
USDe’s Rapid Rise and the Role of the GENIUS Act
The USDe protocol’s success is directly linked to the enactment of the GENIUS Act (Guiding and Establishing National Innovation for U.S. Stablecoins Act), which passed on July 18, 2025. The act introduces a comprehensive federal framework for stablecoins in the U.S., enforcing strict 1:1 reserve requirements and ensuring strong consumer protections. However, the most significant aspect of the GENIUS Act, which has driven the rapid rise of USDe, is the prohibition of regulated stablecoin issuers from paying yields to end users.
As highlighted by Chris Perkins, president of CoinFund, the absence of yield payments on stablecoins under the GENIUS Act has created a shift in market dynamics. Traditional stablecoins, like USDC, once used for yield-bearing services, have seen capital flow out, seeking alternatives where users can still find yield. USDe has captured much of this demand, thriving as a non-regulated option offering attractive yields through decentralized finance (DeFi) mechanisms.
DeFi’s Role in USDe’s Success
USDe’s growth has been propelled by its ability to leverage decentralized finance strategies, which fall outside the regulatory restrictions placed on traditional stablecoin issuers. By providing access to DeFi yield opportunities, USDe has attracted a massive influx of both institutional and retail capital.
The GENIUS Act has fundamentally reshaped the stablecoin market. While it brings tighter oversight and safeguards, it has also opened up opportunities for DeFi-native protocols like Ethena Labs to attract yield-seeking capital. In turn, this has allowed USDe to surpass competitors and dominate the market, drawing attention from large investors looking for yield options in a post-GENIUS regulatory environment.
USDe’s Milestone: A Testament to the GENIUS Act’s Impact
Reaching $10 billion in TVL, USDe has proven that regulatory changes, such as the GENIUS Act, don’t necessarily stifle innovation. Instead, they can create new opportunities for agile players like Ethena Labs to capture capital flows and drive growth. The combination of a favorable regulatory framework and the ability to offer high-yield DeFi services has helped USDe stand out as a leader in the evolving stablecoin landscape.
As Cas Abbé, a prominent crypto trader, pointed out, the growth of USDe can largely be attributed to the shift of capital from traditional, yield-paying stablecoins to alternatives like USDe, which continues to offer lucrative yield opportunities. With its innovative approach and timely integration with DeFi protocols, USDe has solidified its position at the forefront of the stablecoin market.
The rise of USDe marks a significant shift in the stablecoin industry, driven by the regulatory changes introduced by the GENIUS Act. By leveraging DeFi strategies, Ethena Labs has successfully attracted a diverse range of investors, both institutional and retail, propelling USDe to new heights. This milestone shows how regulatory changes can foster innovation, and USDe’s growth signals a broader trend towards decentralized and yield-driven financial solutions.