Despite the rise in on-chain usage, yield compression has still led to a big dump of USDe TVL by 50%.

Golden Finance reports that Ethena's crypto-native synthetic stablecoin USDe generates returns through the funding rate of Perptual Futures, but its total Lock-up Position (TVL) has recently fallen from $14.8 billion in October to $7.6 billion, a decline of over 50%, even though actual usage is still on the rise. This decline highlights the complexity of yield-bearing stablecoins in Decentralized Finance: the leverage mechanism can amplify both growth and contraction cycles. USDe maintains its peg by holding spot encryption assets as collateral and establishing a short position in the Perptual Futures market in the opposite direction, thereby capturing the funding rate difference as returns for holders. Currently, the annualized yield of this stablecoin is approximately 5.1%, significantly lower than the double-digit yields at the beginning of the year, due to the decline in perpetual funding rates in a weaker market environment and reduced leverage demand. Despite the significant decline in TVL, the usage trend of USDe continues to rise, with on-chain trading volume exceeding 50 billion USD last month, indicating that even as speculative positions are deleveraged, the token still maintains its utility.