Compound Finance is expanding its offerings by integrating Ethena’s stablecoin, USDe, and Mantle’s liquid staking token, mETH, into its decentralized lending and borrowing platform. The move was decided through a tokenholder vote on January 8, reflecting the growing adoption of Ethena’s stablecoin and Ether-based liquid staking tokens (LSTs). 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.
Mantle has indicated ongoing discussions to further include cmETH, their liquid restaking token, into Compound’s protocol. This development occurs as DeFi TVL approaches levels not seen since 2021, driven by the adoption of LSTs and liquid restaking tokens (LRTs) 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, though it still falls short of the $170 billion peak of 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 providing additional yields through restaking rewards.
In tandem with TVL expansion, stablecoin market capitalizations have surged, following significant political developments in the US. Since November, Tether’s USDt, USDC, and Dai have collectively grown by over $25 billion. In December, Ethena’s USDe surpassed Maker’s Dai to become the third-largest stablecoin by market capitalization.
Since its launch in February, USDe has attracted significant interest from stablecoin holders seeking high yields, 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.
