ARK Invest Digital Asset Research Director: USDe scale is expected to expand to 40 billion USD

ARK Invest's Director of Digital Asset Research Lorenzo Valente published a discussion on the synthetic dollar protocol Ethena: tokenized stocks are changing the landscape in which ENA operates. He stated that the supply of USDe had bottomed out at $3.8 billion and has now risen by about 30%, recovering to nearly $5 billion.

Lorenzo Valente: The inverted or low funding rates in the crypto market have forced more USDe collateral to shift towards off-chain yields such as government bonds, with sUSDe's average annualized rate once approaching or falling below SOFR; the market capitalization has remained stable over the long term, and the open interest has also limited the pace of expansion. He noted that basis trading has rebounded to about 20% of the collateral and is growing rapidly, with the U.S. stock market size at approximately $70 trillion, averaging over 8% annual growth. Continued bullish demand is expected to bring sustained positive funding rates, with lower stock volatility and lower hedging costs.

He believes this is the first clear path for USDe to expand its supply to over $20 billion, and reaching $30 billion to $40 billion in the next 12 to 18 months would not be surprising, as the upper limit has shifted from crypto open interest to tokenized stock open interest. He also mentioned that Ethena's infrastructure and operations have been validated, and it is expected that Ethena Pay will further drive USDe from the demand side, with the chains, protocols, and vaults supporting USDe's supply and circulation strategies becoming the main beneficiaries.