AaveLabs Proposal “USDe Launches on the MegaETH Market”: Direct sUSDe Yield, 50M Token Supply Cap

AaveLabs submitted a new proposal on the Aave governance forum in order to list Ethena’s synthetic stablecoin USDe on the Aave V3 MegaETH market. The biggest highlight is the “yield passthrough” mechanism: as long as you deposit USDe, it is equivalent to holding sUSDe, so you don’t need to stake anything else to execute leveraged looping strategies. Risk assessment firm LlamaRisk has stated that it supports it.
(Background context: Four cents of ambition: How DeFi is reshaping the stablecoin market through vertical integration)
(Additional background: A comprehensive breakdown of Ethena: the next-generation crypto-dollar Federal Reserve)

On April 6, 2026, AaveLabs submitted a direct-through AIP proposal on the Aave governance forum. The protagonist is Ethena’s synthetic dollar stablecoin USDe, which is currently the third-largest stablecoin by ranking, and whose peak market cap previously exceeded $14 billion. The proposal aims to add USDe for deployment on Aave V3 on MegaETH. Risk firm LlamaRisk has publicly stated that it supports the plan.

USDe isn’t the first time it has appeared in Aave. It has already been deployed across multiple Aave instances, including the Ethereum mainnet, Arbitrum, Base, Avalanche, and Plasma.

MegaETH is an Ethereum L2 that just went live on the mainnet in February this year, focusing on real-time trading speed. Aave itself has also received 30 million MegaETH points as incentives to reward on-chain lending activity.

Yield passthrough is the biggest highlight

The mechanism that deserves the most attention in this proposal is “yield passthrough,” because in the MegaETH deployment, users who deposit USDe will directly receive yield equivalent to holding sUSDe. You don’t need to list sUSDe separately to run a leverage looping strategy.

This mechanism can work in part because the sUSDe un-staking cooling period has already been reduced. For users who want to do yield arbitrage with stablecoins, cutting out one step means one less friction point, and liquidity efficiency improves significantly.

On the risk parameters: the supply cap is set to 50 million tokens, the borrowing cap to 40 million tokens, the optimal utilization rate is 85%, Slope 1 is 4% and Slope 2 is 12%, and the reserve factor is 25%.

In the E-Mode stablecoin mode, USDe can be used as collateral (maximum LTV 90%, liquidation threshold 93%); the borrowing assets are USDm and USDT0.

Bridging relies on LayerZero, but there’s only one way

For USDe’s cross-chain architecture on MegaETH, it uses the LayerZero OFT (omnichain fungible token) standard. The bridge route only integrates Ethereum mainnet; the rate limit is 10 million tokens per hour, and the average daily throughput can theoretically reach $240 million.

LlamaRisk’s risk assessment specifically called this out: having a single bridging route is itself a concentration risk. If the communication channel from LayerZero to Ethereum is disrupted, there is currently no alternative cross-chain route that can pull the funds back. In addition, the MegaETH-specific deployment currently has no chain-specific audit; it only has audit records for Ethena’s core contracts and the LayerZero OFT.

As of April 6, MegaETH’s circulating supply of USDe is approximately 3 million tokens, and the seed liquidity pool USDe/USDm Kumbaya provides about $6 million in liquidity.

From the proposal above, it’s clear that Ethena has expansion ambitions, and it also opens up liquidity for MegaETH in Aave’s pool.