The supply of USDe, the “synthetic dollar” issued by Ethena Labs, has reached an all-time high, surpassing 6 billion tokens in circulation, according to Etherscan.

The supply surge reflects a growth of $697 million in new tokens created in the last week, the second largest weekly creation on record.

The recent rise of USDe also positions it as the third largest stablecoin by market cap, ahead of Sky’s USDS. Some market participants attribute the growth in USDe to growing momentum in the Ethena ecosystem. The protocol’s native token ENA has surged 43% in the last week and 86% in the last month.

This story is an excerpt from the Unchained Daily newsletter.

“Aside from positive market tailwinds with crypto asset prices rising across the board, ENA’s rally stands out for one key reason: Speculation on Fee-Switch Activation,” explained Kairos Research. 

The fee switch activation refers to the process by which Ethena begins distributing a portion of its protocol revenue to ENA token stakers. One of the key conditions for this activation was USDe reaching $6 billion in circulation.

“In addition to the business model that captures native yield, Ethena has plans to launch an Ethereum L2 via Arbitrum (Converge Chain) that will host a native perp DEX (Ethereal) and other financial apps,” said The DeFi report in its latest Ethena Memo.

“This could ultimately introduce fee-based revenue streams from trading & bridging that ultimately benefit ENA holders.”