Ethena Labs’ USDe launches as margin collateral on Bybit with 20% APR

Ethena Labs’ synthetic dollar is launching as margin collateral on cryptocurrency exchange Bybit amid increased adoption of the USDe token. 

The new integration will launch USDe as a margin collateral for traders with an annual percentare rate (APR) of up to 20%.

For traders on Bybit, this will introduce more efficiency and flexibility in trading strategies, according to Ben Zhou, the co-founder and CEO of Bybit. Zhou told Cointelegraph:

“By leveraging USDe, traders can now benefit from a unique combination of stability and potential yield, as they manage their collateral. For Bybit users, this means access to a diversified range of stablecoin options, including a crypto-native solution like USDe.”

The new integration will also enable Bybit users to earn rewards on their collateral, explained Guy Young, the founder of Ethena Labs. Young told Cointelegraph:

“Users for the first time will be able to benefit from potential rewards and value accrual on their collateral while they trade on Bybit. This can be used to offset funding costs on their positions and capture more value for users.”

Ethena Labs is among the most prominent protocols that gained popularity in 2024. Ethena could become the highest revenue-generating crypto project on the market, according to predictions from José Maria Macedo, the CEO of Delphi Labs and the founding partner of crypto investment firm Delphi Ventures.

Ethena Labs’ USDe yield is a testament to the “strength” of the protocol: Bybit CEO

Ethena’s USDe synthetic dollar initially launched with a 27.6% APY in February, creating widespread concerns among crypto investors, since the APY was considerably higher than the 20% yield offered by Anchor Protocol on Terra’s UST before the algorithmic stablecoin issuer Terra collapsed in May 2022.

However, the synthetic dollar managed to uphold a high yield of over 12.3% APY for over 262,000 users, according to its homepage.

This strong yield is another testament for the robustness of the protocol, according to Bybit’s Zhou:

“Ethena's ability to maintain a high yield on USDe despite initial concerns is a testament to the strength of their protocol. This achievement is particularly impressive given the challenging market conditions.”

Will USDe surpass $4 billion in TVL following Bybit integration?

Ethena’s USDe is currently worth over $3.2 billion in total value locked (TVL), over five months after launch. It’s TVL fell by over 10.9% during the past month, according to DeFiLlama.

While the $4 billion TVL mark is still far, the use cases introduced by the new integration could add to the synthetic dollar’s growth, according to Ethena Labs’ Young:

“We hope this partnership leads to wider adoption and usage of USDe in a variety of usecases and the opportunity for USD collateral on exchanges is many billions so we hope to play a meaningful part in that.”

Ethena Labs’ USD yield is publicly verifiable. Young told Cointelegraph that the synthetic dollar’s yield is generated via staking returns and shorting Ether perpetual futures contracts.