Ethena Hit by 50% TVL Decline as USDe Holders Rush to Exit

• Ethena’s TVL dropped over 50% amid heavy USDe redemptions.
• Yield compression accelerated withdrawals and forced leveraged positions to unwind.

Ethereum is facing severe pressure after the total value locked (TVL) on its platform plummeted by more than 50%. From roughly $14 billion, Ethena’s TVL has dropped to around $6–$7 billion, a decline that highlights how quickly capital rushed out, leaving the protocol in a far more cautious position.

According to Dune, since October, more than $8 billion in net redemptions have been recorded from USDe, including an outflow of over $5 billion in just one month. Additionally, the decline in yields, previously considered quite attractive to DeFi players, has accelerated their withdrawals.

When yields that were once in the double digits suddenly drop to much lower ranges, many strategies that previously seemed reasonable suddenly feel difficult to maintain. At this point, some leveraged positions are finally unwound, and outflows intensify.

Even so, it’s not as if everything collapses so easily. On the other hand, USDe is reportedly still maintaining its value close to $1, while on-chain activity remains vibrant. Nevertheless, the market remains wary of this situation.

For a lot of market participants, this kind of episode underscores that high-yield crypto offerings aren’t merely about big numbers; they can carry unexpected risks too. Clearly, Ethena is currently in a phase that requires careful management. Taking it easy could only exacerbate the situation.

Furthermore, this situation also serves as a mirror for the DeFi ecosystem, which has recently become increasingly crowded with new stablecoin products. Under current pressure, the ecosystem seems forced to prove its resilience. Ethena must therefore adopt a more mature approach to prevent a complete loss of trust.

On the other hand, on November 25, we reported on Ethena joining the SEAL pilot program to strengthen and validate crypto operational security standards across various critical workflows, including incident response frameworks, treasury management, multisig procedures, and system security.

Then, on October 18, we highlighted the launch of Stablecoin-as-a-Service through Conduit, which allows new networks to build custom stablecoins at launch, establishing Ethena as a stablecoin infrastructure provider across DeFi, RWA, and consumer ecosystems.

Further back, in early October, Ethena Labs also partnered with UR Global to expand USDe access across 45 countries through their neobank platform, introducing zero off-ramp fees, multi-currency support, and Mastercard debit card access plans for USDe users.

As of press time, ENA is changing hands at about $0.196, down 1.94% over the last 24 hours and 9.82% over the last 7 days.