USDe Plummets 24% in November as Fiat-Backed Stablecoins Surge

Ethena’s synthetic-dollar stablecoin USDe experienced one of its most significant monthly contractions, while fiat-backed stablecoins such as USDT, USDC, and PYUSD drew in billions in inflows.

According to CoinGecko data, Ethena’s USDe stablecoin declined from a market capitalization of $9.3 billion on Nov. 1 to $7.1 billion by Nov. 30. The token faced around $2.2 billion in redemptions, resulting in a 24% supply decrease in November.

USDe is a synthetic stablecoin that maintains its dollar peg through trading strategies involving cryptocurrencies and futures contracts instead of holding actual dollars. This indicates that USDe outflows stem from users either selling USDe on the open market, withdrawing from pools, or unwinding their positions on decentralized applications (DApps).

As of the current analysis, CoinGecko data indicates that the total stablecoin market cap is $311 billion, with US dollar stablecoins dominating, comprising $303 billion of this total.

USDe outflows follow October depeg

The contraction of USDe in November follows a depegging incident on the Binance exchange in October, where USDe briefly fell to $0.65.

Ethena founder Guy Young attributed this drop to a Binance-specific oracle malfunction rather than an issue with USDe’s collateral support mechanism.

Young clarified that the minting and redemption processes for USDe operated “seamlessly” during the event, with around 2 billion tokens redeemed across decentralized finance (DeFi) platforms.

On Oct. 9, USDe’s market cap stood at $14.8 billion, positioning it as the third-largest stablecoin. Since then, it has lost over 53% of its market capitalization.

Currently, CoinGecko data shows USDe holding a valuation of $6.9 billion, placing it fourth in the stablecoin market cap rankings.

Related: Lawmakers struggle with stablecoin terminology as US Congress questions Fed’s Bowman

Fiat-backed stablecoins grew by $3.2 billion in November

Despite challenges for the synthetic-dollar stablecoin, fiat-backed stablecoins saw steady growth during the same period.

Tether’s USDt (USDT) increased by $1.3 billion, reaching $184.6 billion, while Circle’s USDC (USDC) rose to $76.5 billion, adding approximately $600 million to its supply.

PayPal USD (PYUSD) demonstrated the strongest performance among the major dollar-pegged stablecoins, soaring from $2.8 billion to $3.8 billion in November. This reflects a $1 billion inflow for the month, amounting to a 35% month-on-month growth.

DefiLlama data revealed that PayPal’s PYUSD stablecoin has grown over 216% since September, when its market cap was $1.2 billion, indicating a $2.6 billion increase in just three months.

Meanwhile, Ripple’s (RLUSD) stablecoin, which surpassed a market capitalization of $1 billion for the first time in November, maintained its upward trend throughout the month.

CoinGecko reports that RLUSD increased from a $960 million market cap on Nov. 1 to $1.26 billion on Nov. 30, reflecting a $300 million rise.