Jack Paul 
Terminal Finance Optimizes Yield-Bearing Stablecoin Trading
Terminal Finance is emerging as a specialized decentralized exchange designed specifically for Ethena’s yield-bearing stablecoins. The platform uses a concentrated liquidity model similar to Uniswap v3, but with key modifications for assets like sUSDe. What makes Terminal different is how it handles the yield component.
Normally, when you provide a yield-bearing asset in a liquidity pool, you face impermanent loss as the token’s price increases from earned interest. Terminal solves this through a redeemable token system. When liquidity providers deposit sUSDe, the protocol wraps it into rUSDe – a token fixed at $1 value that periodically mints additional units to represent earned yield.
This approach separates price from yield, ensuring arbitrageurs can’t drain pools when sUSDe’s price rises. Liquidity providers receive yield as new rUSDe tokens rather than seeing their original tokens appreciate, effectively eliminating impermanent loss from yield increases.
Aave Integrates sUSDe as Collateral Asset
Aave, the established money market protocol, has integrated staked USDe as a collateral asset. This means holders can deposit sUSDe and borrow other assets while continuing to earn yield in the background. The integration has proven significant – by 2025, over half of all USDe-related assets were deposited into Aave’s markets.
The protocol’s risk management features, particularly the High Efficiency Mode for stablecoins, have enhanced this relationship. This allows for higher borrowing power with highly correlated assets, making USDe and other stablecoins more capital-efficient for users.
Pendle Enables Yield Trading and Management
In an ecosystem where yields are central, Pendle provides tools to trade and manage income streams effectively. The protocol splits assets like sUSDe into two components: a principal token representing the fixed claim to the original asset, and a yield token representing rights to future yield.
This mechanism enables various strategies. Users can deposit USDe to get sUSDe, then use Pendle to split it and sell the yield token to lock in fixed yield upfront. Alternatively, yield-seeking traders can buy yield tokens to leverage variable interest rates without borrowing or liquidation risk.
By mid-September, the Terminal tUSDe pool on Pendle had attracted over $230 million in deposits, becoming the highest-yielding USDe market on the platform.
Term Finance Offers Fixed-Rate Lending Solutions
Not all lending needs floating rates, and Term Finance addresses this gap with fixed-rate lending and borrowing for crypto assets, including USDe. The protocol uses an auction model where lenders and borrowers submit bids in periodic auctions.
The system matches these bids to establish a single interest rate for all participants of that term, eliminating individual negotiation or order books. This allows USDe holders to lend at fixed rates for specific durations, while borrowers know exactly what interest they’ll pay.
The auction mechanism finds one clearing rate without slippage or rate spreads between lenders and borrowers, creating capital-efficient and transparent fixed-income products for the DeFi space.