Castle Labs Weekly: Ethena Pay Drives $80 Million in Demand, New Opportunities Emerge in the Hyperliquid Ecosystem

Ethena's new banking product Ethena Pay has attracted $7.64 million in Earn+ deposits, which has driven roughly $80 million in demand for USDe through leveraged exposure offering up to 12% APY. The flywheel matters because Ethena's $ENA buyback mechanism activates once USDe supply crosses $7.5 billion, making any product that expands genuine USDe demand material for the token. Meanwhile, Elysium, an Arbitrum Orbit-based L2 settling to HyperEVM with $HYPE as its gas token, launched its mainnet and has already drawn over $50 million in net bridged funds, though DEX pool liquidity remains thin, leaving elevated LP yields that are expected to compress quickly. Elysium routes 50% of sequencer revenue to buybacks, 25% to its treasury and 25% to developer incentives, and plans a core upgrade in four weeks to read Hyperliquid's underlying order book directly. Elsewhere in the Hyperliquid ecosystem, Paragon launched Power Perps under HIP-3, embedding option-like convexity into perpetuals without strikes or expiries, while the HIP-4 prediction market is accelerating with deployer Outcome dominating volume. Watch for Ethena's account-tier upgrade requiring ENA holdings and locking, Elysium's order-book integration, and whether USDe supply approaches the $7.5 billion buyback threshold.