Stablecoins remain crypto's most successful product and one of the hottest narratives in recent months, as seen by Circle's IPO, Plasma's ICO and the passing of the GENIUS Act. In recent weeks, Ethena's resurgence has taken the spotlight, with USDe's supply increasing by almost 80% in the past month and cementing it as the fastest-growing stablecoin.

Crypto markets rebounded into the weekly close on Sunday, extending the relief rally into Monday as major US stock indices (Dow Jones, Nasdaq, S&P 500) saw their biggest daily percentage gain since May 27. 

The chart below shows the price performance of major crypto assets over the past seven days. ETH has shown remarkable relative strength in the bounce, up ~9% from the lows on Saturday and outperforming BTC week over week (-1.9% vs. -2.4%). On the other hand, SOL and HYPE saw steeper drawdowns over the past week, down 7.4% and 11.1%, respectively.

The chart below shows the 7-day performance of Ethereum and Solana ecosystem indices against their respective benchmarks (ETH and SOL). Each ecosystem index is composed of 10 constituents, with the weights determined on a market cap basis. We can see that while Solana’s top 10 index had the same week-over-week return as SOL (-7.4%), Ethereum’s top 10 index underperformed its benchmark (-5.8% vs. -1.9% for ETH).

— Carlos

Institutional DeFi has crossed the chasm from dream to reality and Ethena is leading the charge. $USDe has seen a $3.1B inflow over the last 3 weeks, outpacing all Bitcoin ETFs combined.

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ETH's outperformance in recent weeks has been driven by institutional inflows. Spot ETH ETFs in the US registered $5.4b in net inflows in July, more than 5x larger than BTC ETF inflows on a market cap-adjusted basis (1.36% vs. 0.26%). Below, we show the weekly net flows to market cap ratio of US crypto spot ETFs.

The other primary source of institutional inflows for ETH has come from treasury companies, also referred to as Digital Asset Treasuries (DATs). The chart below shows that Ethereum DATs have increased their aggregate holdings by 223k ETH (~$815m) over the past week, of which 208k ETH (~$760m) came from Tom Lee's BitMine (BMNR). In this regard, yesterday's disclosure revealed that BitMine now holds 833k ETH, valued at ~$3b.

— Carlos

Top of mind

Ethena is firmly in the driver’s seat. In just one month, the supply of USDe has grown by 75%, from $5.3b at the start of July to nearly $9.3b today, positioning it as the fastest growing stablecoin. Interestingly, this growth comes amidst a modest funding environment, with an 11% APY on sUSDe that pales compared to the >30% figures posted in December 2024. 

USDe is perhaps one of the best case studies in the composability of DeFi instruments as “money legos.” Integrations with Pendle’s yield market and Aave’s money market have offered a myriad of vectors for the market to participate in the return profile of the instruments. Each of these markets have provided premier venues for distribution of the instrument, now demonstrating a large majority of its utilization and accounting for a significant share of the recent demand.

Pendle is now home to $2.8b in sUSDe, $1.15b in Ethereal’s eUSDe, $750m in USDe, and $145m in Terminal’s tUSDe — for a total of over $4.8b in Ethena instruments and accounting for ~50% utilization Ethena’s TVL. With low variance in the principal and high variance in the APY, sUSDe and Pendle’s yield market are a match made in heaven. 

Downstream of Ethena’s success and its listings on Pendle, Aave has found blockbuster demand in collateral listings for these instruments as well. Since first listing PT-sUSDe and PT-eUSDe in the end of April, Aave has amassed nearly $3.2b in deposits for these collateral types.

With max LTVs of 89%-91% depending on the stablecoin borrowed, there remains only $3m in borrow power available across these instruments, suggesting that depositors are leveraged to the max. While underwriting against Pendle’s once-fringe principal tokens was previously dominated by Morpho and Euler, Aave’s recent entrance has quickly shifted the landscape — growing from 0% to 80% market share in the utilization of these collateral types on money markets within just a few months.

Out of all crypto assets available on major onchain money markets, the sUSDe principal token exhibits the highest utilization of its circulating supply as collateral on money markets at over 82%, reaffirming a thesis that it is one of the most attractive financial instruments that crypto has to offer. With 70% topline growth in Ethena’s sUSDe, a majority utilization of these instruments on Pendle’s yield markets, and blockbuster demand to leverage against these instruments on Aave, the Ethena <> Pendle <> Aave synergy remains one of the most important dynamics at play within DeFi. 

— Luke

Resolv: Beta to Ethena’s Growth

On July 24, Resolv announced a 10% protocol fee-share, aligning protocol revenue directly with token-value accrual, referred to as the RESOLV flywheel. With no team or investor unlocks until June 2026, Resolv offers beta exposure to Ethena’s growth with reduced short-term supply overhang.

Pipe Network Valuation and Market Positioning

Pipe Network is a decentralized content delivery network (dCDN) that replaces the sparse, capital intensive data center footprint of traditional CDNs with a permissionless mesh of independent node operators. By orchestrating under-utilized resources that already exist at the edge, rather than purchasing or leasing thousands of servers, Pipe slashes capital intensity while letting supply expand autonomously in the places where bandwidth is scarcest and most expensive.