MEXC invests $20M in Ethena Labs and USDe to boost Stablecoin Adoption

MEXC, the leading global Cryptocurrency Exchange, announced on Wednesday that it has made a whopping 20 million dollars investment in the synthetic dollar build by Ethena, USDe, in order to drive the stablecoin adoption.
It further revealed that MEXC Ventures, the investment arm of MEXC, has allocated $16M for USDe developer, Ethena Labs.

The synthetic dollar protocol, Ethena, receives this further push of investment only two days after it made public its $100 million investment from Franklin Templeton and and F-Prime Capital, the venture capital firm affiliated with Fidelity Investments, among others.

Though the funding was made in December, Bloomberg reported the USDe maker, Ethena’s funding only two days earlier.

This strategic infusion by MEXC in Ethena and its stablecoin USDe, aims to bolster stablecoin adoption besides working towards fostering innovation within the decentralized finance (DeFi) ecosystem.

We're driving #Stablecoin adoption with a $20M investment in $USDe, #Ethena's synthetic dollar, and $16M in @ethena_labs.

And that's not all – we're launching a $1M reward pool campaign to get you involved! 🔥

Read to learn more and stay tuned! ▶️https://t.co/TBdrwT6VDD pic.twitter.com/YjrZFNZq0m

— MEXC (@MEXC_Official) February 26, 2025

Potential Impact on USDe and Stablecoin Markets after MEXC’s Investment

Ethena’s synthetic dollar stablecoin, USDe, is the third-largest stablecoin by market capitalization after Tether’s USDt and Circle’s USD Coin. It maintains its peg to the U.S. dollar via an automated delta-hedging strategy.

This involves shorting Bitcoin and Ethereum perpetual futures to offset potential price fluctuations. By this, it ensures stability without direct reliance on fiat reserves. This innovative approach has propelled USDe’s circulating supply to nearly $5.9 billion.

MEXC’s infusion of capital into USDe and Ethena Labs arrives at a time when the stablecoin market is experiencing rapid growth and increased competition. With the combined value of stablecoins now exceeding $220 billion, stablecoins like USDe are poised to capture significant market share by offering decentralized and yield-bearing alternatives to traditional stablecoins.

Tracy Jin, COO of MEXC, speaking to Coingape on the investment said, “Stablecoins serve a critical role in the cryptocurrency ecosystem, providing an on-ramp for digital currencies and bridging the gap between traditional finance and decentralized markets. Through our investment in Ethena and its innovative USDe stablecoin, we are supporting the development of stablecoin solutions that cater to the diverse needs of traders, investors, and everyday users.”

With MEXC’s backing, USDe can gain higher trading volume and market penetration, making it more attractive to users and DeFi protocols. Further, a major investment signalling trust in USDe’s model, MEXC’s influence can lead to USDe adoption by more exchanges and DeFi platforms, boosting its use cases.

To further stimulate interest and participation in the USDe ecosystem, MEXC has also launched a $1 million reward pool. This initiative offers users zero-fee trading pairs and high-APR staking events, providing lucrative incentives for both new and existing participants. These benefits can be accessible through MEXC’s centralized exchange platform, simplifying the process for users to engage with and trade USDe.

Competition among the top USD-pegged assets set to heat up

Ethena’s USDe has been emerging as a key player as the rise of decentralized and synthetic stablecoins reshape the landscape.

As Ethena reportedly aims to use the funds building a blockchain and token for the traditional finance industry, the competition among the top three stablecoins is further set to heat up.

Tether’s USDt is currently leading the market with $140 billion in circulation followed by Circle’s USD coin (USDC), maintaining a circulating supply of approximately 55.95 billion USDC tokens. Ethena’s unique synthetic architecture for USDe distinguishes it among its peers.

Unlike USDC or USDT, USDe isn’t backed by fiat reserves held in banks, reducing regulatory and counterparty risks. It also allows USDe holders to earn yields, derived from staking rewards and funding rates from futures markets. USDe further provides a new model of stability by using a hedging mechanism instead of fiat reserves – that can thrive in DeFi ecosystem.

However, for USDe to challenge USDT and USDC, it must integrate deeply into the DeFi ecosystem. With major exchanges and DeFi platforms (like Pendle and Ethereal) already embracing USDe, its adoption is indeed accelerating. And with MEXC investing $20 million into Ethena’s USDe, confidence in synthetic stablecoins is set to get further boost.

If Ethena can maintain stability, increase adoption, and address regulatory concerns, it does has the potential to reshape the stablecoin market.