USDe on Base surges 25,645% to $337M in 90 days

Three months ago, USDe on Base was a rounding error. Today it’s a $337 million presence on Coinbase’s Layer 2 network, making it the fastest-growing stablecoin with at least $100 million in market cap. A 25,645% increase in 90 days will do that.

The numbers behind the surge

USDe now commands approximately 8.27% of its total global supply on Base alone. That global supply sits around $4.08 billion, spread across 21 different chains, with Ethereum still holding the lion’s share.

On Base specifically, USDe has climbed to the second-largest stablecoin position. That’s notable given Base’s total stablecoin supply is approximately $5 billion, with USDC dominating at roughly 85% market share.

Over the last 30 days, USDe recorded net inflows of $67 million on Base, which points to consistent minting activity rather than a single whale-driven spike.

How USDe actually works

Unlike USDC or USDT, which back each token with reserves of dollars and dollar-equivalent assets sitting in bank accounts, USDe takes a fundamentally different approach. It’s a synthetic dollar built on a delta-neutral hedging strategy: Ethena holds spot crypto assets, primarily Bitcoin and Ethereum, and simultaneously opens equal short positions in perpetual futures contracts. When BTC goes up, the spot holdings gain value but the short positions lose an equivalent amount. When BTC goes down, the reverse happens. The result is a position that stays roughly dollar-neutral regardless of which direction crypto markets move.

The funding rates on perpetual futures, which traders pay to maintain leveraged long positions, flow to the short side. Ethena passes this yield to holders through sUSDe, the staked version of the token.

Why Base, and why now

Ethena Labs and Coinbase have established partnerships around custody and high-yield product integration. When the exchange that built the chain is actively working with the stablecoin issuer, distribution becomes significantly easier.

Morpho, a lending and borrowing protocol on Base, has been a key venue for USDe deployment. These integrations create composable yield opportunities, where users can deposit USDe as collateral, borrow against it, and deploy the borrowed assets elsewhere.

Risks and what to watch

Starting from a small base makes percentage gains look astronomical. Going from roughly $1.3 million to $337 million is significant in absolute terms, but USDe on Base is still dwarfed by USDC’s roughly $4.25 billion presence on the same chain.

During periods of negative funding rates, when the market is overwhelmingly bearish and shorts have to pay longs, the strategy can become costly rather than profitable. Ethena maintains a reserve fund to buffer against these periods, but prolonged negative funding could pressure yields and potentially trigger outflows.

Counterparty risk on the exchanges where Ethena holds its futures positions is another factor. The positions are distributed across multiple venues, but a major exchange failure could create a temporary gap in the hedge.

Disclosure: This article was edited by Editorial Team. For more information on how we create and review content, see our Editorial Policy.