Compound Finance expands offerings with Ethena and Mantle tokens

Compound Finance has officially integrated Ethena’s (CRYPTO:ENA) stablecoin, and Mantle’s (CRYPTO:MNT) liquid staking token (LST), mETH, into its decentralised lending platform, as announced on January 9, 2025.

This decision follows a successful vote by Compound’s tokenholders on January 8, reflecting the increasing adoption of yield-bearing stablecoins and liquid staking tokens in the decentralised finance (DeFi) space.

With this integration, Compound aims to enhance its lending options, further solidifying its position as one of the leading DeFi protocols on the Ethereum (CRYPTO:ETH) network, which currently holds over $2.7 billion in total value locked (TVL).

Mantle has also indicated that discussions are ongoing about the potential introduction of cmETH, a liquid restaking token that could provide additional benefits to users.

The total DeFi TVL has seen significant growth recently, reaching approximately $117 billion as of January 9.

This marks a nearly 150% increase year-to-date and is approaching levels not seen since 2021.

This surge is attributed in part to the growing popularity of liquid staking tokens like mETH and cmETH.

Restaking allows users to utilise tokens that have already been staked as collateral for other protocols, creating new opportunities for yield generation.

As of now, Mantle’s mETH generates an annual yield of 2.86% on staked ETH, while cmETH is expected to enhance yields through restaking rewards.

In addition to the growth in DeFi TVL, stablecoin market capitalisations have also surged significantly following recent political developments in the United States.

Since November 2024, Tether's USDt, USD Coin, and Dai have collectively increased by over $25 billion in market capitalisation.

Ethena's USDe has emerged as a significant player in this market, surpassing Maker's Dai in total market capitalisation to become the third-largest stablecoin.

Launched in February 2024, USDe has attracted substantial interest from investors seeking high yields, boasting an average annual percentage yield (APY) of 17.5%.

“Since February 2024, sUSDe holders have enjoyed an average APY of 17.5%, peaking at 55.9% (March 7, 2024) and bottoming at 4.3% (August 8, 2024),” stated cryptocurrency researcher Messari.

Currently, staked USDe is yielding approximately 11.25% annually, further emphasising its appeal within the DeFi ecosystem.

At the time of reporting, the Ethena (ENA) price was $0.9432, and the Mantle (MNT) price was $1.18.