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

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