Ethena Whitelabel: Ending the Stablecoin Value Leakage

The Problem with Stablecoins in DeFi

A Value Leak from Ecosystems

Since the start of 2025, the total market capitalization of stablecoins has surged by more than 48%, now exceeding $300 billion. Yet after over a decade of undisputed dominance, the historical Tether-Circle duopoly is clearly under threat.

For years, stablecoins were seen as neutral, indispensable infrastructure: a means of payment, a store of value, a unit of account. But as their collateral has become increasingly institutionalized-particularly through U.S. Treasuries yielding 4-5% annually-their economic nature has fundamentally changed.

Stablecoins have effectively become synthetic bonds, generating massive income for their issuers. The business model behind Tether and Circle relies on a predatory structure: all of this yield ends up entirely in their coffers. Meanwhile, the blockchains and protocols that actually distribute these assets don’t receive a single cent.

This structural misalignment-often referred to as the “stablecoin tax”-creates a massive value outflow from crypto ecosystems. Take Ethereum, for example: with over $130 billion worth of USDT and USDC circulating on the network, the two issuers generate around $9 billion in annual revenue-17 times more than Ethereum’s own annualized fee revenue.

That’s all value that could otherwise be reinvested directly into ecosystems-to fund incentives, attract developers, reward users, or even set up buyback programs to sustain their native tokens.

The End of Tether and Circle’s Hegemony

So why did such a model grow unchecked, at the expense of potentially massive ecosystem revenues?

In reality, issuing a stablecoin used to be a major technical, financial, and regulatory challenge: recognized and reliable collateral, audits, licenses, infrastructure, on-chain rails, and so on.

It was also an adoption issue: the network effects of USDC and USDT were so strong that launching a competing stablecoin was both too risky and too expensive. That’s why the dominance of these two issuers only deepened in recent years.

But that moat is now being eroded. DeFi infrastructure has matured; custody and compliance solutions are now institutional-grade; and regulation finally offers a clear framework for issuing institutional stablecoins (notably with the GENIUS Act in the U.S.).

At the same time, advances in interoperability have made stablecoins easily transferable across networks, reducing Tether and Circle’s historical liquidity advantage. These three factors have effectively removed the barriers that prevented ecosystems from taking back control of their own stablecoins.

It’s precisely in this context that Ethena’s “Whitelabel” solution emerges-offering a turnkey alternative that allows every blockchain, protocol, or application to launch its own native stablecoin while capturing the associated yield.

Ethena’s Whitelabel Offer: a Stablecoin-as-a-Service

Overview

In September 2025, Ethena announced the launch of a new service: Ethena Whitelabel. It is a stablecoin-as-a-service infrastructure that enables any blockchain, application, or wallet to issue a stablecoin while minimizing the usual technical complexity involved.

This offer builds on the same technology that made Ethena famous: the USDe engine. But unlike USDe, whitelabel stablecoins are fully sovereign in their branding, usage, and distribution, while Ethena acts solely as a monetary infrastructure provider.

More importantly, Ethena allows partners to keep the majority of the yield generated. It is a win-win model that lets different players unlock a new revenue vertical that was previously reserved for dominant issuers, while Ethena strengthens its brand, its TVL, and consequently its income.

In practice, Ethena’s whitelabel offer is a direct response to the problem described above: ecosystems can now regain control of the revenue streams generated by their stablecoins, without having to manage the technical or regulatory burdens themselves.

How It Works

Behind the apparent simplicity of the concept, Ethena’s model relies on a highly robust architecture. Each whitelabel stablecoin is backed by a configurable combination of two underlying assets:

• USDe, Ethena’s on-chain stablecoin, which earns yield through a delta-neutral strategy on derivatives markets
• USDtb, a tokenized version of U.S. Treasury bills issued via the BUIDL fund (BlackRock x Securitize), providing a stable and regulated yield

→ For a deeper dive, read our analysis on Ethena’s various stablecoins, how they work, and their respective roles:

The mechanism is relatively straightforward. Any application or blockchain can build its own stablecoin through one of three approaches:

• Collateral 100% in USDtb (the stablecoin backed by BlackRock’s tokenized BUIDL fund)
• Collateral 100% in USDe (Ethena’s synthetic stablecoin)
• A hybrid approach, combining USDtb and USDe as collateral

The chosen strategy is not fixed. Ethena offers an evolutionary model: a project adopting the whitelabel offer can start with a 100% USDtb model and later shift to a different configuration (for example, a hybrid mix).

This flexibility makes the system particularly resilient. When U.S. debt yields are high, the Treasury-backed USDtb becomes especially attractive. When yields fall, the delta-neutral strategy of USDe takes over and becomes more profitable.

In both cases, the underlying idea remains the same: any protocol or blockchain can now issue a native stablecoin with an embedded yield mechanism.

In parallel, Ethena plans to introduce a liquidity layer, a PSM-type (Peg Stability Module) system, allowing Whitelabel partners to swap their USDtb-backed assets for stablecoins held in the USDe reserve (USDC, USDT, etc.). This ensures instant liquidity and helps prevent secondary market fragmentation.

Another key advantage lies in Ethena’s operational expertise. It is one of the few projects that can boast tens of billions of dollars in mint & redeem operations without incident. For reference, USDe is currently the third-largest stablecoin by market capitalization, behind Tether and Circle, and its market share continues to rise.

Finally, by removing the technical barriers traditionally tied to stablecoin creation, Ethena allows issuers to deploy their assets in just a few weeks, compared to several months previously.

Partner Mapping

Although recently announced, Ethena’s Whitelabel solution has already attracted major players. Giants like Sui, MegaETH, and Jupiter have confirmed their adoption to take full advantage of these new revenue streams.

• MegaETH: USDm

MegaETH plans to launch its native stablecoin, USDm, based on USDtb. The yield generated will be used to subsidize sequencer and transaction fees, helping maintain extremely low and stable costs for users and developers.

This is a real-world example where a stablecoin becomes a cornerstone of the ecosystem thanks to its underlying yield. Most importantly, MegaETH becomes the first blockchain infrastructure to operate its own stablecoin and open a new revenue source - a crucial milestone in a context where most blockchains remain unprofitable.

• Jupiter: jupUSD

Jupiter is also betting on a stablecoin backed by USDtb. This asset will have multiple use cases, serving as the default currency of the Jupiter ecosystem: trading, DeFi, lending, and more.

Jupiter will immediately convert $750 million worth of USDC from its reserves into jupUSD on day one, putting the asset in the spotlight from the start. These funds will now work for Jupiter and its ecosystem instead of for Circle. For Ethena, it is a powerful showcase on Solana, as Jupiter is literally the largest protocol on the network.

• Sui: suiUSDe and USDi

Sui is taking a different approach, planning to launch two stablecoins: suiUSDe, fully collateralized by USDe, and USDi, backed by USDtb.

The suiUSDe is designed to fully leverage the yield-bearing model, as all the revenue it generates will fund a buyback program for SUI, the blockchain’s native token. USDi, on the other hand, follows a more conservative design: backed by USDtb (the tokenized BUIDL fund from BlackRock), it will serve more general DeFi and payment use cases.

Like Jupiter, by adopting Ethena’s Stablecoin-as-a-Service offer, Sui enables Ethena to expand beyond its traditional focus on Ethereum and the EVM ecosystem.

More recently, blockchain infrastructure providers Caldera and Conduit have added Whitelabel to their tooling marketplaces. In other words, blockchains built on Caldera or Conduit can now integrate this innovation natively - a potential game changer for Ethena.

A Virtuous Circle for Ethena and Its Users

The whitelabel offer creates a virtuous circle between partner growth, Ethena’s rising TVL, and the value captured by its users. The impact for blockchains and protocols is clear: sovereignty over their stablecoin flows, additional massive revenue streams, and stronger incentives to grow and fund their ecosystems.

For Ethena, the more partners it gains, the stronger its infrastructure becomes. Each time a new actor issues a stablecoin through the service, demand for USDe and USDtb increases mechanically. This drives Ethena’s TVL higher, deepens ecosystem liquidity, and ultimately fuels the revenues shared with sENA holders, the staked version of the ENA token.

It is a unique model of horizontal integration in DeFi: Ethena does not aim to centralize monetary power, but to become the invisible layer behind all on-chain payments, capturing a small fraction of the yield from every stablecoin issued on top of its system.

For users, USDe offers an attractive source of income. By staking it, they receive sUSDe in return and gain access to yields far higher than those offered by USDC, USDT, or any stablecoin whose revenues are not shared.

This helps explain the phenomenal growth of USDe: its market capitalization has increased by 105% since the beginning of the year, and by 172% in the last quarter (Q3). Other factors also play a role, notably the successful integration of USDe within the Binance Earn ecosystem.

The growth of USDe directly benefits its holders and users in several ways: deeper liquidity means lower spreads and less slippage. In other words, USDe is becoming a stablecoin that can be traded and swapped easily and efficiently.

Most importantly, with the upcoming activation of the fee switch, sENA holders (the staked ENA token) are also expected to benefit. They will share part of the protocol’s generated revenue. And what better way to extend Ethena and its suite of products than by offering a turnkey stablecoin launch stack built around a revenue-sharing model?

In the end, it is Ethena’s users who stand to gain the most from this virtuous cycle.

Outlook

The opportunities are countless: wallet-native stablecoins that generate competitive yields through staking, neobanks (such as Mantle’s UR project, which has already integrated USDe as its first stablecoin), and even prediction markets, where massive amounts of dormant stablecoins could finally be put to work.

With the rise of these new models, which directly invert the power dynamics long dominated by centralized issuers, a new trend is clearly emerging.

A turning point was already visible when Hyperliquid invited various established stablecoin issuers to compete in designing and launching its native stablecoin, USDH. The idea behind it was to create an asset that could become the engine of a virtuous cycle within its own ecosystem, directly echoing the revenue-sharing model pioneered by Ethena.

In cases like USDH, it is no longer the platforms that must “submit” to the model imposed by industry giants, but rather the opposite: these giants must compete to offer the most attractive solution in order to earn a place within dynamic, investor-friendly ecosystems.

Over time, we can therefore expect the emergence of native stablecoins, specific to their own ecosystems, which will finally benefit from revenue streams that had long been out of reach. This is precisely the direction pointed to by this new technical layer designed by Ethena.