Stablecoins have become one of the best examples of product market fit in crypto and power the industry’s onchain and offchain economy. Every week there is a new headline about Wall Street incumbents working on their own stablecoin as the use cases for both their users and  the business have become clear. However, there is a trend emerging in DeFi that could significantly upset the stablecoin power dynamic: Stablecoin as a Service.

As a result of the widespread adoption of stablecoins in crypto and decisions made when the industry was a lot less mature, many chains and apps have been tied to stablecoin issuers that internalize most or all of the revenue generated by the stablecoin’s backing, ensuring no value flows back into the ecosystems using them. The Treasury bills backing the largest stablecoins earn billions of dollars in yield that is sacrificed by those chains and apps, who themselves tend to make less on fees on their platform/chain than the stablecoins they partner with.

However, chains and apps have started to wake up to the fact that they hold the key to a lot of the success of these stablecoins as key distribution partners. The success of Ethena and other rewarding digital dollars in the industry have also proven that users care about receiving rewards on their dollar holdings. Both of these realities have shifted the power dynamics of issuers vs distribution partners today, with partners starting to prioritize issuers that will share revenues back to the ecosystems they deploy on.

Enter stablecoin-as-a-service, a model that turns the old dynamic on its head. The idea is simple: instead of relying on an outside stablecoin, a chain or application can launch its own “whitelabel” stablecoin, with the help of a specialized issuer as a backend provider. Crucially, the majority of the stablecoin’s reserve yield is retained by the partner (the chain or app), not the issuer. In effect, the partner gets to internalize the revenue stream from their stablecoin’s backing assets, turning what used to be lost yield into a powerful source of income for the ecosystem.

Stablecoin as a Service represents a changing power dynamic in the stablecoin market. The turning point can be attributed to the recent Hyperliquid USDH proposal. Rather than continue to channel all trading activity through USDC, Hyperliquid proposed a native stablecoin called USDH so it could recycle reserve interest back into its own ecosystem via token buybacks and user incentives.

Notably, Hyperliquid invited established issuers to bid for the role of issuing/managing USDH, flipping the script so that the issuers must offer the best deal to the platform. Projects like Paxos, Ethena, Sky, Frax, and others lined up with proposals, each outlining how much of the yield they’d return to Hyperliquid and its ecosystem. Paxos’s proposal, for instance, offered to pass through about 95% of Treasury yield back to Hyperliquid (for HYPE token buybacks and ecosystem growth) while retaining only ~5% as an issuer fee. Ethena’s proposal also pledged to return at least 95% of net reserve revenue to the Hyperliquid ecosystem, cover migration costs for existing markets, and allocate up to $150 million in incentives for liquidity, integrations, and ecosystem growth.

This kind of competitive dynamic marks a pivotal shift. Chains and apps no longer have to accept whatever terms the major issuers dictate; instead, they can shop around or partner with providers that let them capture the value. Over time, this could erode the dominance of legacy stablecoins that don’t share revenue. Combined, USDT and USDC account for ~84% of stablecoin market cap today.

If users can get similar utility from a native stablecoin that also fuels their favorite platform’s growth (and perhaps even offers them higher yields or rewards), the appeal of holding one of the incumbent stablecoins which pay no interest will likely diminish.

Using the 5 chains in the chart below just as an example, over $1.1bn is paid out in yield annually across those chains to a combination of Circle and Tether.

That amount paid out is ~40% higher than the fees earned by those 5 chains on an annualized basis. Were chains to launch their own whitelabel stablecoin and internalize yields, most chains would over 2x their revenue in an instant.

That $1.1bn can go towards user rewards, token buybacks, defi incentives or wherever the chain sees fit - each option being more value accretive to the ecosystem/chain vs paying out 100% to issuers.

Stablecoins can easily become the biggest revenue drivers for most chains and apps

This September, we introduced Ethena Whitelabel: Ethena’s stablecoin-as-a service stack

Since its introduction, Ethena has secured major partners, including MegaETH, SUI, and most recently Jupiter.

Ethena Whitelabel allows any chain, application, wallet or distribution that owns the end consumer to build their own stablecoin with Ethena. In this setup, the partner issuer retains a majority of the economics of the backing assets, enabling revenue to flow back to the chain or app. Ethena will retain a minority share of the economics from integrations of USDe and USDtb that will flow back as Ethena protocol revenue.

Ethena as a partner for Stablecoin as a Service offers several core benefits:

Ethena offers a unique degree of flexibility in how a partner’s stablecoin can be structured. Specifically, Ethena supports two complementary dollar products: USDtb and USDe – which the partner can use in any combination for their stablecoin’s reserves.

Partners can start with a pure USDtb backing for simplicity, earning approximately T-Bill rates, or mix in USDe to potentially boost APY, and they have the freedom to adjust that mix over time as market conditions change. For example, the Solana-based Jupiter is launching JupUSD via Ethena and will initially back it 100% with USDtb (BlackRock’s T-bill fund), but may transition to USDe for higher yield in the future.

This kind of optionality is rare among stablecoin issuers. It ensures that if interest rates drop amid current interest rate cuts, or new yield opportunities arise, partners can seamlessly switch their stablecoin’s backing to optimize returns.

Not many issuers have a track record of managing stablecoins in the multi billions of size. Outside of Tether and Circle, the only issuers left at multi billion dollar scale are Ethena and Sky. Chains want to be working with partners who are used to issuing stablecoins at size, particularly those chains with mature ecosystems already. Ethena has handled over $25bn of mint/redeem flows to date with no depegs.

A new whitelabel stablecoin can be up and running in a matter of weeks, not months, leveraging Ethena’s smart contract infrastructure and compliance framework. Additionally, Ethena brings deep go-to-market expertise from having grown its own dollar products across both DeFi and CeFi. Partners can tap into this knowledge and network, from liquidity to ecosystem apps, to quickly scale adoption of their new stablecoin.

Outside of networks, we think four forms of apps can benefit the most from Ethena Whitelabel:

Wallet users hold tens of billions of dollars of stablecoins idle, those assets can be put to use through a stablecoin and savings-like product powered by Ethena Whitelabel. Doing so will increase retention for those assets within the wallet's ecosystem.

There are billions of dollars sitting in perp DEX balances earning 0 today. Unlocking this capital to sit in an Ethena Whitelabel stablecoin can either drive more returns to users or promote an additional revenue stream to fund market makers, trading competitions, and general protocol growth. A case study for the success of exchanges with dollars that bear rewards are Binance, whose USDe integration has grown >$5b in the past 3 weeks, and Bybit, where there is more USDe than USDC deposited.

Longer-dated prediction markets have inherent problems due to balances on most / all perp DEXes not earning a base rate. As a result, less capital is willing to bet against tail risk events happening because the expected 'return' is too low; simultaneously, a lack of base rate can lead to less liquidity in these often illiquid markets. Introducing a Whitelabel offering to provide a base rate to users or as an alternative source of revenue or funding can solve these liquidity problems while also promoting more users to store capital on their prediction market account.

Similar to wallets, the neobanks of today and the upcoming crypto neobanks of the future will hold billions of dollars of user capital, which can be unlocked and made more productive via a stablecoin that the neobank has control over.

Sui is set to launch two native stablecoins in Q4 2025 through Ethena Whitelabel: suiUSDe and USDi. The former is a reward-bearing synthetic dollar modeled on Ethena’s USDe, and the latter is a fiat collateralized stablecoin backed by USDtb. This dual-stablecoin approach gives Sui users access to both a high-rewarding stable asset and a low-risk fiat-equivalent stablecoin. Importantly, by introducing its own stablecoins, Sui will recycle value back into its ecosystem.

Revenue from suiUSDe reserves will be used to buy and burn SUI tokens, boosting the network’s value and liquidity. This makes Sui one of the first major non-EVM chains to turn stablecoins into a native revenue source, rather than a cost. It also showcases Ethena’s ability to tailor solutions (yielding vs. non-yielding stablecoins) to a partner’s needs.

Jupiter, a leading DEX aggregator and DeFi platform on Solana, has partnered with Ethena to launch JupUSD as the native stablecoin for its suite of products. Jupiter plans to convert about $750 million of USDC liquidity from its pools into JupUSD, instantly making JupUSD a major player on Solana.

The stablecoin will be deeply integrated: used as collateral in Jupiter’s perps exchange, as the base asset in its mobile app and trading interfaces, as a primary liquidity token in lending markets, and more. Initially JupUSD will be 100% backed by USDtb, but Jupiter has the option to shift to Ethena’s USDe for higher yield down the line.

By taking this route, rather than all the interest from that $750M USDC going to Circle, those funds will now generate yield that Jupiter can use to incentivize its users and grow its platform. This example underlines how even established ecosystems can quickly flip an external dependency into an internal growth flywheel by leveraging Ethena’s stablecoin-as-a-service.

MegaETH was Ethena’s first SaaS partner to announce, introducing its native stablecoin USDm. Backed by USDtb reserves, USDm’s yield is being used to subsidize MegaETH’s sequencer/transaction fees, keeping user fees low and stable while effectively funneling stablecoin revenue to improve the chain’s usability. Via Ethena Whitelabel, MegaETH uses a native stablecoin to enable cheap and stable fees - a creative application of the stablecoin revenue that strengthens its competitive advantage.

As Ethena’s Whitelabel network expands, Ethena grows TVL for both USDe and USDtb while also receiving economic upside in the growth of other ecosystems. Revenue share agreements can see a substantial amount of revenue from these partnerships flow back to Ethena for use as protocol revenue - which will benefit sENA holders post-fee switch.

Ethena Whitelabel allows Ethena TVL and network effects to expand even faster than ever and could be the next big catalyst to increase Ethena’s market share in the stablecoin industry.