DeFi's Trifecta: Ethena, Pendle, & Aave

Introduction

The dynamic between Ethena, Pendle, and Aave is one of the fastest growing and mutually-beneficial dynamics within DeFi.

Ethena

Ethena is at the top of the funnel to this dynamic. The USDe supply has grown over 75% this past month, crossing $10B, amidst a modest funding rate environment and only a 9% APY (7 DMA) on sUSDe, which remains much lower than the 30% figures we observed back during the previous major growth phase in Q4 of last year.

Elevated APYs don’t fully reconcile the USDe growth observed over the past month. Instead, a few key dynamics have brought forth tremendous demand for Ethena’s products. 

1. ENA token appreciation raising the implied yield on USDe given the 60x sats (Ethena’s points campaign), and