Compound Finance is adding Ethena’s stablecoin and Mantle’s liquid staking token (LST) to its decentralized lending and borrowing platform, Mantle told Cointelegraph.
On January 8, Compound’s token holders voted to add the stablecoin USDe and Mantle’s LST, mETH, as lending collateral to the decentralized finance (DeFi) protocol.
This integration is the latest example of accelerated adoption of Ethena’s popular yielding stablecoin and Ether (ETH) LST.
According to DefiLlama, Compound is one of the most popular DeFi lending protocols on the Ethereum network, with total total value locked (TVL) of over $2.7 billion.
“Discussions are ongoing to introduce and integrate cmETH into Compound,” Mantle said in a statement, referring to the DeFi protocol’s liquidity restaking token (LRT).
TVL in Complex Finance. source: Dipilama
DeFi TVL Growth
According to DefiLlama, DeFi TVL is approaching highs not seen since 2021, due in part to the adoption of LSTs and LRTs such as mETH and cmETH.
According to DefiLlama, total DeFi TVL as of January 9 was $117 billion, an increase of nearly 150% year-on-year. This still lags the 2021 peak of $170 billion, the data shows.
Re-staking involves taking tokens that have already been staked (posted as collateral with validators in return for rewards) and using them to secure another protocol at the same time.
As of January 9, Mantle’s mETH generated a 2.86% annualized return on staked ETH. cmETH tokens further improve returns with re-deposit rewards.
Total DeFi TVL. source: Dipilama
Stablecoin adoption
Stablecoin market capitalization has increased sharply since US President-elect Donald Trump won the November 5 election. Trump promised to make the United States the “crypto capital of the world.”
Combined market capitalization of the top three stablecoins since November — Tether’s USDt USDTUSDC USDCand die die — Overall, it has grown by more than $25 billion, according to investment bank Citi.
In December, Ethena’s USDe surpassed Sky (formerly Maker) Dai in total market capitalization, becoming the third-largest stablecoin behind USDT and USDC.
Launched in February, USDe has bootstrapped billions of dollars from stablecoin holders seeking double-digit APRs.
“Since February 2024, sUSDe holders have enjoyed an average APY of 17.5%, with a high of 55.9% (March 7, 2024) and a low of 4.3% (August 8, 2024),” cryptocurrency researcher Messari wrote in a December note. 1) was recorded,” he said.
According to DefiLlama, as of January 9, staked USDe (sUSDe) is yielding approximately 11.25% per annum.
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