Compound Finance Integrates Ethena's USDe Stablecoin and Mantle's mETH Liquid Staking Token

Compound, one of the most popular DeFi lending protocols on the Ethereum network, holds over $2.7 billion in total value locked (TVL), according to DefiLlama.

Decentralized finance (DeFi) lending and borrowing platform Compound Finance is set to integrate Ethena’s stablecoin, USDe, and Mantle’s liquid staking token, mETH, following a successful tokenholder vote on January 8.

The move comes amid growing adoption of Ethena’s stablecoin and Ether-based liquid staking tokens (LSTs) in the broader DeFi ecosystem.

Compound, one of the most popular DeFi lending protocols on the Ethereum network, currently holds over $2.7 billion in total value locked (TVL), according to data from DefiLlama.

Meanwhile, Mantle has indicated ongoing discussions to further integrate their liquid restaking token, cmETH, into Compound’s protocol.

This development coincides with a broader trend of increasing DeFi TVL, largely driven by the adoption of LSTs and liquid restaking tokens like mETH and cmETH.

As of January 9, the total DeFi TVL stands at over $117 billion, marking a substantial 150% increase year-to-date, according to data from DeFi Pulse. However, it still falls short of the $170 billion peak observed in 2021.

Restaking involves using staked tokens, which earn rewards by being posted as collateral with a validator, to simultaneously secure multiple protocols.

Mantle’s mETH currently offers a 2.86% annual yield on staked Ether, with the cmETH token designed to provide additional yields through restaking rewards.

In another development, stablecoin market capitalizations have surged following significant political developments in the U.S., driving demand for pegged assets.

Since November, Tether’s USDt, USDC, and Dai have collectively seen their market caps increase by over $25 billion.

In December, Ethena’s USDe surpassed Maker’s Dai to become the third-largest stablecoin by market capitalization.

Launched in February, USDe has attracted interest from stablecoin holders seeking high yields, with the token boasting an average APY of 17.5% and hitting a high of 55.9% in March.

As of January 9, staked USDe, or sUSDe, is yielding approximately 11.25% annually.