USDe, the synthetic dollar from Ethena, has grown past $4.9 billion in circulation, still about $2.6 billion short of the $7.5 billion level that would switch the protocol’s fee mechanism on and start 95 percent net revenue flowing into ENA buybacks, according to data cited by The Block, DefiLlama and a Foundation governance proposal.
The gap matters for Ethena because holders voted the buyback live in August, with 95 percent of net revenue from USDe savings and white-label stablecoins set to fund automatic ENA purchases once circulating USDe reaches $7.5 billion on a 14 day average supply basis. At a $10 billion threshold the slice rises to 10 percent of net revenue, at $15 billion to 15 percent and at $20 billion to 20 percent. The Foundation estimated $22.5 million in annualized revenue would be available for buybacks at the first threshold, assuming a 6 percent APY on positions behind the token.
Supply momentum is moving the protocol in the right direction. Ethena disclosed last week that USDe grew by more than $700 million and became the largest dollar collateral asset on the lending protocol Morpho. The stablecoin also launched on Tron. DefiLlama’s latest snapshot shows circulating supply at $4.903 billion with USDe trading at its $1 peg, though the weekly change on Ethereum sits near flat at plus 0.17 percent versus a 26 percent jump over a month.
The unlock the market watches
Two days from now, October 5, the protocol will release all remaining investor-allocated ENA in one event, roughly 1.4 billion tokens, about 14 percent of circulating supply. The consolidation ends monthly vesting about 17 months earlier than the original schedule. Team tokens stay locked.
Standard Chartered set a $2 target for ENA by the end of 2028, expecting USDe to grow eightfold to about $40 billion and Ethena to buy back tokens from rising revenue. Reached at $0.26, the target implied about 669 percent upside, writes The Block.
Votes on the proposal closed September 2 in favor. Since then, ENA has become one of the more watched tokens of the quarter, rallying 76 percent in a month ahead of the unlock. The rally outpaced most major exchange tokens, though price momentum did fracture near the end of September as traders hedged positions before the unlock window.
How the yield engine diverged from USDT
Unlike USDT, which is backed mostly by cash and treasury instruments and now claims a larger volume than many major banks, USDe has no reserve fund in the traditional sense. Instead, the protocol holds spot collateral and shorts perpetual futures to stay neutral on the underlying asset while earning the funding paid by leveraged longs. The basis behind it has at times delivered double-digit annualized yields and powered a suite of linked products including sUSDe, a yield-bearing wrapper used by savers, and a white-label synthetic dollar that other issuers can brand under their own name.
The model broke down brief periods at the extremes. During the October 2025 liquidation cascade, USDe traded down to $0.65 on Binance, while the price deviation on decentralized exchanges stayed near 0.3 percent. A similar dislocation printed in late September 2026, when the token reprinted around $0.92 for a day and recovered within 24 hours.
Standard Chartered wrote last week that Ethena is broadening the yield engine behind USDe as returns from the crypto basis trade have fallen, adding real world assets, DeFi lending, liquid stablecoins and equity and commodity-linked basis trades as newer sources of yield. Its thesis assumes yield-bearing stablecoins, about 5 percent of the stablecoin market now, keep scaling. Ethena ranks as the fourth-largest stablecoin issuer behind Tether, Circle and Sky, and second among issuers of yield-bearing coins.
What closes the $2.6 billion gap
The path from $4.9 billion to $7.5 billion in USDe circulation depends on where the protocol can source incremental dollars. A large Binance integration from last year embedded USDe as collateral across the exchange. The equity basis trade announced last month pushed the same design into tokenized stocks listed through Binance’s bStocks, an allocation the Risk Committee had approved earlier after a review that appears to have considered liquidity and hedging costs briefly. Binance’s equity perpetual open interest sits above $2.9 billion and grew at a compound monthly rate of 105 percent during 2026, with the equity basis averaging 3.56 percent annualized over six months.
Ethena also benefits from a much broader stablecoin market that returned to growth in the second half of this year after a pause in the spring and early summer. Traders and institutional desks have rotated from idle dollars into tickets that earn yield, raising demand for these assets across exchanges and supported chains. Binance’s own dollar token, for instance, has expanded again, bridging to more chains through the period, while USD1 of the Vaultka-Stacks consortium, once niche, has been adding listings.
The second half test is broader than the fee switch. The fee mechanism assumes holders stay long ENA after buying and raises regulatory questions because the synthetic dollar itself lost a CREF-style test in some quarters. If holders fail to stay long, or if regulators tighten miCA-style rules on synthetic dollars in Europe, the growth rate behind the $7.5 billion threshold could compress rather than compound through year-end.
For now, holders of the token are watching two key dates. The October 5 unlock tests whether supply pressure from the one-off event forces a sell-off after the 76 percent month. The fee-switch threshold then tests whether the stablecoin can keep compounding through the last quarter of 2026.