Aave V4 on Ethereum now distributes USDe rewards through a dedicated Ethena ecosystem market. The protocol has launched a specialized environment with two Spokes, which is the largest ecosystem-specific deployment at launch. This setup supports USDe, sUSDe, PT-sUSDe, and PT-USDe as collateral assets.
Users can deposit USDe and sUSDe to borrow against them or use recursive borrowing loops, known as Aavethena strategies, to increase yield. USDe is a delta-neutral synthetic dollar backed by productive assets hedged through perpetual futures positions, maintaining near-zero net exposure.
Aave has supported over 50% of the total USDe supply during peak periods, establishing itself as the primary liquidity venue for the asset. The total supply of USDe has recently surpassed $12 billion, having previously crossed the $10 billion mark in under 500 days from its launch.
The V4 launch includes a Liquid Leverage feature that allows 50/50 USDe/sUSDe deposits to improve liquidity and rewards while reducing the unstaking cooldown period for sUSDe. Additionally, Aave governance has implemented whitelisted redemption mechanisms to manage inter-protocol risk and prevent destabilizing mass redemptions.
