Solana on-chain synthesis of US dollarsUSDeIt expanded rapidly over the past week. From May 13 to 19, its supply surged from approximately $3.3 million to $567.7 million, an increase of over 170 times. The core factor driving this change was the launch of independent lending markets for USDe by Jupiter Lend and Kamino.
The lending market expanded rapidly after its launch.
On May 13, Jupiter Exchange, in partnership with Bitwise, Ethena, and Fluid, launched the USDe-exclusive lending marketplace. Jupiter provides the lending platform, Bitwise handles curation and risk management, Ethena provides the USDe assets, and Fluid provides the underlying lending infrastructure.
This market employs a separate pool design, separating USDe-related risks from other Jupiter Lend liquidity pools. For institutions and large funds, this structure makes it easier to manage risk exposure independently and also facilitates absorbing concentrated inflows.
On the same day, Kamino also launched the Ethena marketplace and the USDe Growth Initiative with Sentora. Subsequently, the demand for USDe deposits and loans on the Solana blockchain increased significantly.
Kamino's market value surpassed $400 million in 24 hours.
Kamino stated on May 14 that the Ethena Marketplace has become the fastest-growing market in the platform's history and the first to surpass $400 million in market size.
- The $200 million borrowing limit was reached within 24 hours.
- Attracting over $225 million in USDe deposits
- The overall market deployment size exceeds US$420 million.
Looking at the changes in on-chain supply, USDe first rose from about $3.5 million to $9.9 million on May 13, and then quickly jumped to about $151.7 million on May 14. It continued to expand thereafter, reaching $567.7 million on May 19.
Revolving lending amplified the demand for USDe
This growth largely stems from the revolving lending strategy common in DeFi. Users first deposit USDe, then borrow assets using the deposit as collateral, and subsequently deposit the borrowed assets back into the protocol, thereby amplifying returns.
These operations are often automated by the protocol, so when new markets open and yields are high, funds tend to flow in rapidly. At the same time, revolving lending amplifies liquidation risk and makes positions more dependent on changes in funding rates and lending terms.
How does Ethena support USDe?
Ethena defines USDe as a crypto-native synthetic dollar. Unlike stablecoins that rely entirely on cash reserves, USDe is backed by spot crypto assets, derivatives positions, and liquid stablecoins such as USDC and USDT.
The agreement maintains relative stability by hedging the exposure between spot and perpetual contracts, as well as delivery contracts. Ethena also stated that perpetual contract positions currently account for only 11% of the USDe support structure, with the remainder coming from stablecoin reserves, DeFi lending positions, institutional lending arrangements, and other channels.
Additional information:Ethena has recently been expanding its institutional lending partners, including Anchorage Digital, Maple Institutional, and Coinbase Asset Management, and is attempting to incorporate tokenized real-world assets, commodity basis trading, and gold-related perpetual markets into its broader portfolio.
