The decentralized exchange (DEX) realm has been quietly reshaping global finance, as evidenced by the fact that the top ten spot DEXs in the market accrued a quarterly trading volume growth of 90% last year (Q4). Not only that, as of June this year, the total value locked across these protocols surged to a whopping $123.6 billion (up 41% YoY).
Amidst this backdrop, Ethena-incubated platform Terminal Finance announced that it had successfully attracted over $280 million in pre-launch deposits. The Seoul-based DEX, which specializes in trading yield-bearing stablecoins and institutional assets, reached this milestone after filling three of its vaults to capacity with 225 million USDe, 10,000 WETH, and 100 WBTC.
A Novel Approach to Decentralized Trading
What makes Terminal's approach particularly interesting is how it rethinks the fundamentals of decentralized trading, wherein instead of treating stablecoins as static assets, it builds around yield-bearing versions that actively generate returns. This philosophy, according to co-founder and CEO Sam Benyakoub, makes liquidity bootstrapping considerably more efficient for token issuers.
“At Terminal, we’re building the deepest liquidity pools to trade Ethena’s synthetic dollar, USDe, against any asset, from crypto to tokenized real-world assets. By designing the DEX around a yield-bearing dollar, Terminal benefits from improved economics by default. This sets a new standard for capital productivity in DeFi."
On a technical front, Terminal's architecture centers on Ethena's synthetic dollar ecosystem, featuring USDe, sUSDe, and USDtb (which is backed by BlackRock's BUIDL fund) as core pairing assets. They can be traded against major cryptos like ETH and BTC, creating what the team envisions as the deepest liquidity pools for Ethena's synthetic dollar against virtually any asset, be it traditional cryptos or tokenized RWAs.
Yield Skimming: The Secret Sauce
The secret sauce behind Terminal's design is a novel mechanism called ‘Yield Skimming.’ Instead of letting the yield generated by assets like sUSDe simply accrue, this mechanism redirects it back to the platform, creating a flywheel effect benefiting everyone, including liquidity providers, traders, and token holders.
As expected, the response from the community was substantial, with more than 10,000 wallets participating in Terminal's pre-deposit phase. These early supporters are set to receive airdrop rewards post the Token Generation Event (TGE).
Tokenomics and Strategic Vision
On the tokenomics front, up to 10 percent of Terminal's governance token supply may be distributed to sENA holders through the ‘Terminal Points’ system, which began tracking activity on June 28. The team still has to confirm final eligibility, allocation quotas, and the timing of this disbursement.
Nick Chong, head of strategy at Ethena, highlighted the strategic importance of Terminal's integration:
“Ethena assets have become an engine for DeFi rewards, powering most major Ethereum-based applications today at a billion-dollar scale. The Terminal team has taken this concept, building their spot DEX using sUSDe at its core, to drive additional value to users.”
A Broader Shift Toward Yield-Bearing Assets
The traditional DEX model has struggled with sustainable economics, particularly around liquidity incentives. Projects traditionally burned through their reserves to attract liquidity providers, creating unsustainable dynamics that frequently collapsed once rewards dried up.
In this context, yield-bearing assets have shifted the calculus for liquidity providers by generating rewards for themselves. This allows them to earn returns from multiple sources simultaneously, benefiting traders through tighter spreads and deeper liquidity, while also enabling protocols to bootstrap markets more efficiently.
Terminal’s $280 million pre-launch deposits and integrations with prominent DeFi protocols like Pendle, EtherFi, and Morpho speak directly to this trend.
Looking forward, the DEX has outlined ambitious plans to expand across multiple chains, becoming a leading liquidity hub connecting yield, liquidity, and token issuance via a unified interface. With Terminal’s launch planned for later this year, coinciding with its TGE, it will be interesting to observe how its vision unites the institutional adoption of tokenized assets with the maturation of yield-bearing stablecoin infrastructure.