Ethena Labs’ synthetic dollar-pegged token Ethena USDe (USDE) has lost over $5 billion of its market capitalization since the Oct. 10 market crash, after the asset experienced a major stress test.
Before the “Black Friday” flash crash — which wiped out over $19 billion in leveraged positions across the market, becoming the largest liquidation event in crypto to date — USDE’s market cap stood above $14.6 billion.
Ethen USDe's market cap fell sharply by about $2 billion on Oct. 10-11 as investors rushed to redeem their USDE, exchanging their tokens for the underlying collateral. According to Ethena Labs’ documentation, each USDE redemption burns the returned USDE, which can reduce the overall token supply, and thus the market capitalization.
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