According to the latest Coinbase report, the continued strength of Bitcoin and other cryptocurrencies has supported an increase in on-chain activity. Over the past week, the total trading volume of decentralized exchanges (DEXs) has risen from $10.4 billion on November 28 to $18.5 billion on December 4, an increase of 78%. The annualized interest rates on Compound have reached 10-20%. The total value locked (TVL) in lending protocols has reached a new high of $54 billion over the past week, surpassing the previous bull market peak of $52 billion.
The rise in stablecoin market capitalization indicates that investors are seeking to capitalize on the growing yields offered by DeFi lending protocols. Investors are searching on-chain for higher beta trades. For example, the recent attention on the HyperLiquid Airdrop and the new AI agent protocol has been limited to on-chain users. Recently, financing rates in both CeFi and DeFi have been significantly higher than the yields available in traditional finance.
Ethena's USDe Rises to Become the Third Largest Stablecoin by Market Cap
Ethena, a stablecoin issuer focused on developing stablecoins that do not rely on traditional finance, backed by crypto influencer Arthur Hayes, has seen its stablecoin USDe's market cap double from $2.5 billion in early October to $5.5 billion, making it the third-largest stablecoin.
Ethena's yield-bearing token sUSDe has seen its annualized yield soar to 27%, a significant increase from around 13% in early November. The ENA token has also seen a substantial increase, rising 94% in the past month.