The USDe supply has witnessed impressive growth, now surpassing $11.4 billion in circulating supply. However, this growth is driven by various dynamics, particularly on the Pendle market where USDe liquidity has gained a boost due to Ethena’s points campaign. Although USDe is not inherently yield-bearing and aims to represent the value of $1, liquidity providers on Pendle benefit from a 70x boost, creating an implied APY of around 14%. This growth creates a flywheel effect: increased USDe supply enhances the market's attractiveness and drives expectations for ENA distributions upward. With over $1 billion in USDe added to the market recently, the utilization of these instruments on platforms like Aave is substantial, raising concerns about potential risks as leverage increases. The evolving dynamics around USDe and its liquidity options continue to shape both market conditions and investor behaviors.

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