The Rise of Next-Gen Stablecoin Projects: WLFI, Plasma, and Ethena

In recent times, the stablecoin sector in crypto has been attracting much attention because of the emergence of outstanding projects. Notably, there is World Liberty Financial with the backing of the Trump family, and Plasma with the support of Tether. In addition, it is impossible not to mention Ethena, a stablecoin project that has been rising strongly with a TVL of more than 12 billion dollars. In this article, let’s go deeper into these three prominent projects.

Key Takeaways

• WLFI: Backed by the Trump family, WLFI raised over $590M and launched the USD1 stablecoin, which has surpassed $2.4B supply. Its ambition is to become the DeFi bank for Americans.
• Plasma: A Bitcoin-anchored, EVM-compatible chain supported by Tether, Plasma reached $1B deposits in record time and aims to be global stablecoin infrastructure.
• Ethena: With its delta-neutral USDe, Ethena hit $12B TVL and generates ~$307M annual revenue, offering high yields.
• Stablecoin Trend: These projects highlight the rapid growth of next-gen stablecoins, bridging DeFi and TradFi while competing to become the backbone of global crypto finance.

World Liberty Financial (WLFI)

World Liberty Financial is a DeFi project announced by Donald Trump in September 2024, with the participation of his two sons, Eric Trump and Donald Trump Jr. The platform focuses on developing on-chain products including stablecoins, lending, and borrowing, with the ambition of becoming the DeFi bank for Americans. In addition to the Trump family, the WLFI team also includes finance and real estate figures such as Chase Herro, Zak Folkman, Steven Witkoff, and Zach Witkoff, along with the advisory support of Justin Sun.

USD1 StableCoin

The heart of the WLFI ecosystem is USD1. Similar to USDT and USDC, USD1 is a stablecoin pegged 1:1 to the US dollar, fully backed by cash and short-term government bonds.

USD1 is used for cross-border payments, DeFi, and has already been integrated on several CEXs such as KuCoin, Coinbase, and Gate.io. In addition, USD1 is integrated with Chainlink CCIP (Cross-Chain Interoperability Protocol). This is a leading interoperability solution in DeFi, which currently secures tens of billions of dollars in assets. CCIP comes with robust security mechanisms and Proof-of-Reserves, providing users and institutions with greater confidence that every USD1 issued is fully backed by real assets. By August 2025, the total supply of USD1 had surpassed 2.4 billion dollars.

Lending & Borrowing

If the US dollar is the foundation of payments, then lending and borrowing will be the engine that generates value. WLFI is developing a lending and borrowing protocol built on the infrastructure of AAVE v3, but aimed at providing a more user-friendly experience for both newcomers and institutions. Along with this, the WLFI app allows users to deposit fiat directly and participate in community governance through token voting in a simpler way. This will create a cycle that transforms WLFI into a money market that can serve as an alternative to traditional banks. Although full of potential, WLFI is still in the building stage and is working to complete its product.

Tokenomics

The native token of the ecosystem is $WLFI, with a total supply of 100 billion tokens. Of this amount, 35% is allocated to token sale, 32.5% to community growth and incentives, 30% to initial supporter allocation, and 2.5% to the team and advisors. A key point is that the token is designed solely for governance, meaning it only grants voting rights in the protocol and does not represent equity or profit sharing. This helps WLFI avoid legal risks related to securities, but it also means the token’s value depends entirely on community trust and the attractiveness of governance.

Fundraising

WLFI is one of the largest fundraising projects in crypto during 2024–2025, raising at least $590 million across multiple rounds. Details include:

• Public sale: Raised $550 million from more than 85,000 investors across two rounds, at different prices of $0.015 and $0.05.
• Private & Strategic Investors: The Aqua1 Foundation from the UAE invested $100 million, while Justin Sun contributed around $90 million. DWF Labs also added $25 million and committed to providing liquidity support for WLFI during its listing phase.
• ALT5 Sigma Agreement (August 2025): A commitment of $1.5 billion for WLFI’s treasury strategy, along with the purchase of approximately 7.5% of the total WLFI supply to be added to the treasury.

WLFI stands out thanks to the Trump brand, its large fundraising amount, and the rapid rise of its USD1 stablecoin, which quickly entered the top 6 with a supply of more than 2.4 billion. Overall, the project possesses abundant financial resources, a wide partner network ranging from Binance to ALT5 Sigma, and a large community of investors from the United States.

Plasma (XPL)

Stablecoins can be considered one of the most important components of crypto. In the path toward mass adoption, stablecoins can be seen as the best RWA product-market fit, with more than 280 billion dollars in circulation and trillions of dollars in transactions every month. Plasma has emerged as an infrastructure project dedicated entirely to stablecoins, with support from Tether, the company behind today’s leading USDT stablecoin.

Plasma is an L1 blockchain, a sidechain of Bitcoin, yet fully compatible with the EVM. It is designed to become a global payment infrastructure for stablecoins. Unlike Ethereum, Tron, or BNB Chain, Plasma brings several key differences, including free USDT transfers, full EVM compatibility, and high-speed transaction processing, while still inheriting the security of the Bitcoin network.

A Hybrid Architecture Between Bitcoin Security and EVM Convenience

The most distinctive feature of Plasma’s architecture is the combination of two elements that may seem contradictory. On one hand, Plasma uses the PlasmaBFT consensus mechanism, which is developed based on HotStuff (an algorithm capable of processing thousands of transactions per second), delivering high throughput, low latency, and fast finality. On the other hand, the execution layer is built on Reth, an EVM client written in Rust, allowing all dApps from Ethereum to be migrated with minimal modifications.

In terms of security, Plasma anchors its chain state directly to Bitcoin, turning it into a trust-minimized settlement layer that reduces reliance on third parties. This means Plasma inherits Bitcoin’s censorship resistance and the security of the UTXO model. The BTC bridge that Plasma is developing also follows a trust-minimized approach, eliminating the need for custodial entities such as wBTC. Before its mainnet launch, Plasma underwent three rounds of audits with Veda, Spearbit, and Zellic to ensure a high level of security for its infrastructure.

Why Plasma Matters for BTCfi

Bitcoin has long been considered the most liquid asset in the crypto market, yet the paradox lies in the fact that its surrounding ecosystem remains relatively underdeveloped. Sidechains or Layer 2s such as Stacks, Rootstock, or Liquid have all attempted to build financial infrastructure for BTC (BTCFi). However, the biggest gap continues to be the lack of stablecoin liquidity. This limitation prevents Bitcoin from becoming the center of activities such as swap, lending, or borrowing as efficiently as Ethereum.

In addition, Plasma is also developing a bridge that allows native BTC to be brought into smart contracts without the need for wrapped tokens or centralized custodians like WBTC or cbBTC. It introduces pBTC, an ERC-20 token backed 1:1 by real BTC and fully compliant with the OFT standard of LayerZero, enabling cross-chain transfers without liquidity fragmentation.

With this combination, Plasma preserves the security and stability of Bitcoin while delivering a smooth and familiar experience for Ethereum developers. This is why many consider Plasma not simply a sidechain but a hybrid infrastructure layer specifically designed for stablecoins. If successful, Plasma will not only be a chain but will also become the SWIFT of the crypto world, bringing USDT closer to the vision of becoming a global payment currency.

Tokenomics & Fundraising

Plasma impresses not only with its technology but also with its fundraising campaign. Previously, the project secured $24 million in investment from Founders Fund (Peter Thiel), Bitfinex, Paolo Ardoino (CEO of Tether), and well-known figures in the crypto community such as Cobie.

However, the real breakthrough came from the Public Sale with results beyond expectations: $373 million was committed to purchasing XPL tokens, while the total stablecoins deposited into the Vault system reached $1 billion. This figure is seven times the initial target, making Plasma the fastest blockchain in history to hit the milestone of $1 billion in deposits, surpassing high-profile names like Aptos, Sui, and Sonic.

Regarding the tokenomics, Plasma issued 10 billion XPL at a public sale price of $0.05 per token, equivalent to an FDV of $500 million. This is a moderate valuation compared to the market average, leaving significant room for growth when the token is listed in the current hot stablecoin narrative.

Plasma also has more than 50 partners, focusing on stablecoins and DeFi, with deep integrations to build its ecosystem. These include organizations such as Tether and Binance, as well as leading DeFi projects like AAVE, Fluid, and Pendle. In addition, there is a wide range of notable stablecoin partners, including USDe and USDS.

Ethena (ENA)

Ethena is a synthetic dollar stablecoin protocol on Ethereum, providing USDe as a crypto-native monetary solution that does not rely on the traditional banking system, with a delta-hedging mechanism to maintain stability.

Ethena Mechanism

Ethena operates on a delta-neutral hedging mechanism to maintain the price of USDe steadily at 1 USD. Users can mint USDe by depositing collateral such as ETH, stETH, BTC, USDT, USDC, or other approved assets. The protocol will automatically open short perpetual futures positions on exchanges such as Bybit and Binance to hedge against the price volatility risk of the collateral.

For example, if a user deposits ETH worth $2,000 and then mints 2,000 USDe, the protocol will open a short ETH perpetual position with a notional value of $2,000. Whether the price goes up or down, the total of the long and short positions remains equal to zero (the initial 1 ETH still holds a value of $2,000), ensuring that the overall value stays stable.

The backing assets are stored on-chain and are maintained in custody by off-exchange providers to reduce counterparty risk.

Where does the yield come from?

The yield of USDe is generated from three main sources:

• Funding and basis spread from hedging (usually positive due to high leverage demand),
• Rewards from liquid stables (such as USDT earning interest on platforms),
• And consensus/execution rewards from staked ETH.

Users stake USDe into sUSDe to earn yield, and they can unstake at any time.

Data About Ethena

The data shows that Ethena is experiencing strong growth, with a TVL of $12.4 billion. USDe supply has reached an all-time high of 12 billion (an increase of more than 100% within one month), demonstrating high adoption from both institutions and retail users. The sUSDe APY of around 9% outperforms traditional fiat interest rates.

From a financial standpoint, the protocol generates revenue from funding spread (mostly positive), rewards from stablecoins, and staked assets. Annual revenue is approximately $307 million, fees are about $914 million, and cumulative gross interest revenue has exceeded $500 million.

In addition, the Reserve Fund is a pool used to cover negative funding, ensuring a stable yield. There are no incentives from token emissions, which helps avoid inflation. Financials are transparent through on-chain dashboards, with revenue distributed primarily to sUSDe holders.

Future Direction

In 2025, Ethena is focusing on the “Convergence” strategy, which is a blockchain initiative aiming to bring DeFi closer to TradFi. The main highlight is iUSDe, which is the institutional version of USDe, and it is designed to integrate yield into the bond market and payment instruments, while also expanding backing assets since BNB, XRP, and HYPE have already been approved.

At the same time, Ethena is launching a Telegram mini-app for payments and savings with sUSDe, and it is also developing additional derivative protocols such as Ethereal (perps) and Derive (options), while expanding into multi-chain. In the long run, Ethena aims to become the “Internet Bond,” which is an asset class that provides higher yield than T-Bills, although major challenges remain because of market volatility and regulatory frameworks.

Advantages and Risks

The greatest strength of Ethena is its ability to generate high yield for stablecoins, which at certain times exceeded 60 percent and is now stabilizing at around 8 to 10 percent. This has allowed USDe to quickly attract capital inflows and rise into the top three stablecoins with more than $12 billion in TVL. With its delta-neutral mechanism, Ethena is both capital-efficient and easily scalable across DeFi as well as CeFi. At the same time, the ENA token is directly tied to revenue when staked, which turns ENA into a cash-flow generating asset and creates a value loop for the entire ecosystem.

However, Ethena also carries risks. In the early stages, most of the yield depended on the funding rate, so when the market corrects, yields could drop to 2 to 4 percent and capital outflows may occur. Relying on CEXs for hedging still exposes the protocol to counterparty risk, while using LSTs as collateral may trigger cascading liquidations if the market becomes highly volatile.

Therefore, Ethena’s backing strategy has undergone a shift. Since the beginning of 2025, the proportion of backing with LSTs compared to the total backing has decreased from 7 percent to 4 percent, while the proportion of backing with stablecoins has increased from 12 percent to 53 percent. This transition shows that Ethena is making a trade-off: instead of relying heavily on LST yield and hedging yield, it is prioritizing stablecoins in order to enhance liquidity and reduce volatility risk. This adjustment also enables USDe to scale more rapidly.

Ethena represents innovation in DeFi stablecoins, with USDe offering high yield and scalability, achieving major milestones such as $12 billion in TVL and $307 million in annual revenue. However, the model remains dependent on the crypto market, with hedging and counterparty risks that need to be closely monitored. The 2025 roadmap promises expansion into TradFi, but success will require both favorable bull market conditions and stronger risk mitigation. Overall, Ethena is suitable for risk-tolerant investors, although diversification is recommended along with careful monitoring of governance updates.