Safe's $6.6 billion stablecoin reserve partners with Ethena, USDe adoption incentive race begins

The competition in stablecoins enters a new stage. On January 14, Safe Foundation and Ethena Labs announced a strategic partnership to promote USDe usage on Ethereum through gas-free transactions and 10x reward points. Behind this is Safe’s management of a $6.6 billion stablecoin ecosystem—of which $65.1 million is held in sUSDe (USDe staking and interest-earning version), accounting for 85% of Ethena’s total assets. This is not just a product collaboration but a deep integration between the custodial wallet ecosystem and stablecoin innovation.

The Stablecoin Ambitions of Custodial Wallets

Safe’s multi-signature wallet has become an important container for on-chain stablecoins. What does the $6.6 billion scale indicate? It means that many institutions and high-net-worth users have already stored funds in custodial solutions. Ethena’s choice to collaborate deeply with Safe is essentially a bid for this ecosystem gateway.

The specific incentives of the partnership are straightforward:

• Gas fee exemption: Reduces friction for users transacting USDe, especially during periods of high Ethereum gas fees
• 10x reward points: Offers significantly higher returns in Ethena’s reward program compared to regular users
• Interest-bearing asset retention: sUSDe holders retain staking yields while receiving additional incentives

These three layers of incentives directly target the interest-free nature of traditional stablecoins (USDT, USDC). According to the latest data, USDT and USDC account for over 83% of the market share, but their core issue is that holding them leads to depreciation. Ethena’s USDe attempts to break this cycle by integrating derivatives arbitrage and ecosystem incentives.

Signals of Upgraded Stablecoin Competition

This partnership reflects deep changes occurring in the stablecoin market. It’s no longer just about price anchoring competition but about ecosystem integration.

Related news shows that innovative stablecoin products are emerging. Jupiter launched JupUSD on Solana, Unitas introduced USDU, a yield-focused stablecoin. Grayscale’s latest Q1 consideration list includes ENA as a potential investment target. All these point to a common trend: decentralized, efficient, interest-earning stablecoins are becoming new focal points of competition.

Meanwhile, regulatory environments are tightening. In Dubai’s new regulatory framework effective January 12, algorithmic stablecoins like Ethena are reclassified as cryptocurrencies rather than stablecoins. This means USDe’s compliance will need adjustments across different jurisdictions. Safe’s partnership offers a solution—strengthening user control through custodial wallets may make it easier to meet future regulatory requirements.

Key Future Focus

Can Safe and Ethena’s collaboration shake the market dominance of USDT/USDC? Likely not in the short term. But the value of this partnership lies in:

• Ecosystem stickiness: Safe’s $6.6 billion user base, once accustomed to USDe, will have high switching costs
• Sustainability of incentives: The 10x reward points are a short-term growth tactic; long-term success depends on whether the ecosystem can deliver real value
• Custodial narrative: In a tightening regulatory environment, products emphasizing user custody will attract more attention

Vitalik previously called for reforming stablecoins towards decentralization to reduce reliance on traditional finance. This partnership, to some extent, responds to that call. The question remains: can USDe maintain decentralization while achieving high capital efficiency and stable yields?

Summary

The collaboration between Safe and Ethena is a clear signal that stablecoin competition is entering an ecosystem contest phase. The $6.6 billion custodial wallet scale, combined with gas-free transactions and 10x incentives, provides a high-quality user entry point for USDe. But it also highlights the harsh reality of the stablecoin market: product innovation alone is not enough; ecosystem support is essential. The true winners in the future will not be the cheapest stablecoins but those with the most complete ecosystems, the most sustainable incentives, and the strongest user stickiness.