Ethena Labs' Liquid Leverage Attracts $1.5 Billion in Cash Flow

Ethena Labs Products Announced

With its synthetic stablecoin USDe and governance token ENA, Athena Labs, a prominent decentralized finance (DeFi) protocol on Ethereum, has made a splash. Ethena was founded with the goal of providing a stablecoin solution that is independent of the traditional banking system. It has grown rapidly thanks to its unique “Internet Bond” model, which uses ETH staking and short futures positions to generate yield. A popular decentralized lending (DeFi) platform, Aave supports advanced financial strategies and is a key part of the Ethereum Money Market infrastructure.

The event began with the launch of Ethena Labs’ Liquid Leverage in late July 2025. It allows users to optimize yields by combining 50% sUSDe (the amount staked) and 50% sUSDe on Aave to take advantage of both borrowing interest and APY from sUSDe. Strong interest from the alternative finance community drove inflows to $1.5 billion just days later. To meet demand, Aave increased the staking limit on the Ethereum exchange, bringing sUSD to around $350 million and USD to $300 million. Additionally, the staking limit for USDe is expected to be increased in September 2025.

The development demonstrates the use of Ethena’s delta-neutral model to generate compound yields; staking USDe with borrowing positions generates compound yields, currently reaching around 12% annual percentage yield (APY) on USDe. Factors such as confidence in USDe—which surpassed $9.3 billion in market capitalization after just one month of a 75% increase in supply—and institutional investor participation have supported this rapid growth. Despite some concerns about high leverage risks, the community on social media platforms expressed excitement and saw this as a step forward in DeFi 2.0.

Milestones of success

Ethena Labs’ position as one of the leading innovators in the freelance finance space is reinforced by the success of Liquid Leverage, which attracted $1.5 billion in inflows in just a few days. Users can take advantage of both the interest yield and APY of sUSDe, currently around 12%, by using a staking version of sUSDe and Ethena’s synthetic dollar.

This improves liquidity and capital efficiency, while reducing the 7-day waiting period to withdraw sUSDe, attracting both institutional and retail investors. The $1.5 billion inflow represents nearly 30% of the current value, with a total USDe supply of around $8 billion and a market cap of $5.01 billion (sUSDe price of $1.19), indicating a high level of confidence in Ethena’s delta-neutral model. This also caused the value of Ethena’s ENA token to increase by 7.45% in the last 24 hours to $0.6176, with a market capitalization of $3.92 billion, reflecting the positive sentiment of the community.

Conclude

Ethena Labs’ Liquid Leverage attracting $1.5 billion in capital inflows since its launch is a major milestone, reflecting innovation in DeFi and confidence in the company’s delta-neutral model. This event brings significant benefits to Ethena and the market, despite the risks of volatility and regulation.

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