Ethena's synthetic stablecoin USDe has seen its total value locked (TVL) plummet from $14.8 billion in October to $7.6 billion, marking a decline of over 50%. This significant drop is primarily attributed to the unwinding of high-leverage loop strategies on lending platforms like Aave. The annualized yield of USDe has fallen to approximately 5.1%, below the 5.4% borrowing cost of USDC on Aave, rendering the previously profitable carry trades, which relied on repeated pledging of sUSDe for over 10x leverage, unprofitable and leading to rapid liquidation.