Double-Dipping: Earning Passive Yield by Pairing frfr.fun Launches with USDe

The year 2026 has brought a real shift in how decentralized finance treats idle capital. Launching a memecoin or community token against a static, non-earning liquidity pool is increasingly seen as a missed opportunity rather than the default move. For DAOs, community leads, and Web3 creators launching tokens on the Base network, capital efficiency has become part of the core pitch: a liquidity pool isn't just a trading venue, it's a balance sheet — and balance sheets that sit idle underperform.

If you're launching a token on a platform like frfr.fun, pairing your new token with Ethena's USDe — and, critically, its staked form sUSDe — instead of plain ETH or a non-yielding stablecoin like USDC opens up what the DeFi community has nicknamed "Double-Dipping": collecting both trading fees and a separate, ongoing yield stream from the same pool of capital.

This guide breaks down how Ethena's USDe and sUSDe actually generate yield, what a realistic return looks like in mid-2026 (not the bull-market peak numbers people quote from 2024), how to structure a frfr.fun launch around the pairing, and — just as important — the risks any team should weigh before committing treasury funds to the strategy.

1. The 2026 Stablecoin Landscape: Where USDe Actually Sits

For years, crypto's stablecoin market ran almost entirely on fiat-backed tokens like USDC and USDT. They're reliable and liquid, but capital sitting in them earns nothing for the holder — yield on the underlying Treasury bills accrues to the issuer, not to whoever is holding the token.

Ethena Labs' USDe was built to change that calculus. It's a "synthetic dollar" — not backed by a bank reserve of dollars, but by a basket of crypto collateral (liquid staking tokens like stETH, spot BTC, and some stablecoin holdings, periodically rebalanced toward Treasury-backed reserves such as BlackRock's BUIDL during stress) paired with an equivalent short position in perpetual futures. The long and short legs cancel out price risk, which is what lets USDe hold its peg without a Treasury bill sitting behind it. Stake USDe and you receive sUSDe — and it's sUSDe, not raw USDe, that actually accrues the protocol's yield, through a redemption rate that rises over time rather than a balance that grows.

It's worth being precise about USDe's actual size, because the "synthetic dollar" story has had a genuinely volatile two years. Circulating supply ran from under $6 billion at the start of 2025 to a peak above $14 billion later that year, before contracting sharply during a Q4 2025 deleveraging event and a regulatory exit from the EU (more on that in the risk section). As of Q1–Q2 2026, supply sits in roughly the $4.5–6 billion range depending on the day you check DeFiLlama — making USDe the third-largest stablecoin by market cap, behind USDT and USDC, and the largest crypto-collateralized synthetic dollar behind Sky's USDS. That's a real, category-leading position in the yield-bearing stablecoin niche on Base and elsewhere — but it is not "dominating the stablecoin market" in the way it's sometimes pitched, and any deck implying USDe is bigger than USDC or USDT is simply wrong.

The yield itself comes from two sources:

Staking rewards on the collateral. The liquid-staked ETH backing part of USDe earns ordinary Ethereum staking yield, currently around 3% APY.
Perpetual funding rates. Crypto perp markets are structurally long-biased — traders pay a premium to hold leveraged long positions, and short-side hedgers like Ethena collect that payment. Ethena's own data suggests funding is net-positive on roughly 82–85% of days, which is the structural reason this has worked more often than not. "Most days" is not "every day," though, and the days it doesn't work are exactly when a treasury needs stability most.

2. The Flaw in Traditional Liquidity Pools

When a creator launches a token via an automated market maker on a DEX, they need to seed initial liquidity. Historically, that's meant pairing the new token with ETH or with a plain stablecoin like USDC.

The opportunity cost of idle capital. In a $TOKEN/USDC pool, the USDC side provides trading depth but earns nothing on its own. The only revenue the pool generates is the fractional trading fee paid by buyers and sellers — and in a quiet market, that approaches zero.

The volatility trap of ETH pairs. Pairing with ETH exposes the treasury to ETH's price swings. If ETH falls sharply, the dollar value of the pool falls with it, widening slippage on the community token and sometimes triggering a feedback loop of panic selling — entirely disconnected from how the actual community token is performing.

What a lot of DAOs want instead is a pairing asset with a dollar peg and a yield engine attached to it.

3. Base, Aerodrome, and Where frfr.fun Fits

Base — Coinbase's Ethereum L2, built on the OP Stack — has become one of the default chains for consumer crypto activity, largely on the strength of consistently sub-cent gas fees and fast finality. Aerodrome Finance is the chain's dominant liquidity venue, holding roughly half of all value locked on Base; its concentrated-liquidity product, Slipstream, is what most serious token pairs route through today.

frfr.fun sits inside that ecosystem as a launchpad for memecoins and community tokens. The pattern described in this guide — pairing a new token against a yield-bearing asset instead of WETH or plain USDC — follows the same general workflow available on Base through Aerodrome's pool-creation flow and aggregators like 1inch and Odos. One honest caveat: the exact labels, tabs, and dashboard features any launchpad's interface uses can change between releases, so treat the UI steps below as a description of the general workflow rather than a guaranteed match to frfr.fun's current screens — confirm against the live product before you click anything that moves funds.

4. The Double-Dipping Mechanism, Correctly Explained

"Double-Dipping" means earning two separate income streams from one pool of capital. Here's the part that's easy to get wrong: the second stream only exists if the stablecoin side of the pool is actually staked.

Revenue Stream 1: DEX Trading Fees. When your $TOKEN/sUSDe pair trades on Aerodrome, every swap pays a fee to liquidity providers. Aerodrome's Slipstream pools offer four fee tiers — 0.01% for ultra-correlated stable pairs, 0.05% for stable/correlated pairs, 0.30% for standard pairs, and 1.00% for volatile or exotic pairs. A new memecoin paired against a stablecoin-equivalent will typically sit in the 0.30%–1.00% range, since the memecoin side of the pair is anything but stable.

Revenue Stream 2: Native sUSDe Yield — and Why It Has to Be sUSDe. This is the step the "USDe is automatically yield-bearing" pitch usually glosses over. Plain USDe, sitting unstaked in a wallet or a liquidity pool, earns nothing — Ethena's own documentation is explicit that the floating, unstaked supply forgoes yield in exchange for being usable as plain collateral. Only sUSDe, the token you receive by staking USDe, accrues the protocol's yield, via a redemption rate that rises over time (1 sUSDe redeemed for roughly 1.18 USDe as of late April 2026, up from 1:1 at inception, per Ethena's published exchange rate). So if a DAO wants its liquidity pool to passively earn yield on the stable side, the pool needs to actually hold sUSDe — staking isn't an optional nice-to-have here, it's the entire mechanism.

A more honest version of the math. Say a DAO seeds a $500,000 pool: $250,000 in $TOKEN, $250,000 in sUSDe.

At a realistic mid-2026 yield of roughly 4–10% — sUSDe's trailing 7-day APY has run in the high single digits through Q2 2026, well off 2024's ~18% full-year average and its 35% Q1 2024 peak — that $250,000 generates somewhere between $10,000 and $25,000 a year in passive yield before any trading activity at all.
A bull-market scenario closer to 2024's average (~18%) would generate roughly $45,000 a year on the same position — but treating that as the expected case rather than the optimistic case is how DAOs end up disappointed six months later.
Add whatever trading fees the pool earns on top of that — call it $10,000–$25,000 a year for a moderately active memecoin pool — and total passive-plus-fee revenue lands somewhere in the $20,000–$70,000 range, depending on market conditions, not a single number you can promise in advance.

That revenue can fund developer grants, marketing, exchange listings, or a buyback-and-burn program — but it's a range tied to real funding-rate conditions, not a fixed APY.

5. Step-by-Step: Setting Up the Pairing

Step 1: Acquire USDe and stake it. Get USDe via the Ethena app or by swapping USDC/USDT on a major aggregator, then stake it through Ethena's staking contract to receive sUSDe. This is the step that actually converts "stable pairing asset" into "yield-bearing pairing asset" — skipping it means you've built a $TOKEN/USDC pool with extra steps.

Step 2: Get sUSDe onto Base. Ethena has extended sUSDe beyond Ethereum to several chains, including via cross-chain mint mechanisms, and routes like Stargate or Across can move value across chains generally. Bridge support and exact routes shift over time, so before moving any funds, verify the current sUSDe contract address for Base directly against Ethena's official "Key Addresses" documentation (docs.ethena.fi) — never trust a contract address copied from a blog post, a Telegram group, or social media, including this one. A wrong address in crypto isn't a typo, it's a permanent loss, and that's true regardless of how the rest of this guide reads.

Step 3: Configure your token on frfr.fun. Name, ticker, supply mechanics, and any buy/sell tax structure as usual — keeping taxes low or at zero generally helps sustain volume.

Step 4: Select sUSDe as your pairing asset. Where the platform defaults to WETH or USDC, look for the option to specify a custom ERC-20 pairing asset, input sUSDe's verified Base contract address, and deposit your sUSDe alongside your newly minted token.

Step 5: Launch and lock. Once deployed, lock the LP position through whatever locking mechanism your launchpad offers, so holders can see the liquidity can't be pulled. Because the stable side of the pool is sUSDe rather than USDC, the position's dollar value keeps drifting upward from yield accrual even while it's locked, on top of whatever trading fees come in.

6. The Marketing Angle — and a Caution About It

"Our Treasury Pays for Itself." A self-funding treasury is a genuinely strong pitch to early holders: unlike a project whose dev fund dries up the moment volume slows, a treasury backed by sUSDe keeps earning in the background. That's a real differentiator versus a plain WETH or USDC pool, and it's reasonable to lead with it.

Bear Market Resilience. Half of a $TOKEN/sUSDe pool is dollar-pegged, which meaningfully dampens the pool's price volatility compared with a $TOKEN/ETH pair during a market-wide drawdown — and yield accruing on the sUSDe side keeps adding fresh value to the pool independent of how the token itself is trading.

The Buyback-and-Burn Flywheel. This is the sturdiest piece of the pitch, because it doesn't depend on hitting a specific yield number: route whatever sUSDe yield does accrue into periodic market buys of your own token, then burn them. Supply goes down, deflationary pressure goes up, and the mechanism is funded by the treasury rather than by selling new tokens into the market — true at a 4% yield and just bigger at an 18% yield.

The caution: don't market a specific APY number as if it's fixed. sUSDe's yield has ranged from roughly 4% to 35% across 2024–2026 depending on funding-rate conditions, and it can compress fast — an 11-day stretch in August 2024 saw it fall from about 19% to about 4%. Promising a community "guaranteed 15–20% APY" sets up a credibility problem the first time funding rates flip. Anchor public claims to the trailing 7-day or 90-day average published on Ethena's own dashboard, cite the date you pulled it, and frame the rest as a range rather than a guarantee.

7. Risks and Mitigations (the Part That Actually Protects Your Community)

Smart contract risk. A $TOKEN/sUSDe pool carries the combined contract risk of your DEX, Ethena's minting and staking contracts, and the sUSDe vault wrapper itself. Aerodrome's contracts have gone through multiple third-party audits and are open-source; Ethena publishes its own audit history and a live transparency dashboard. Audits reduce this risk — they don't take it to zero.

Funding-rate inversion risk — with real numbers, not a hypothetical. This has actually happened, more than once. In August 2024, a sustained negative-funding stretch compressed sUSDe's APY from about 19% to about 4% in eleven days. In October 2025, a sharp BTC flash crash (BTC fell roughly 16.5% intraday) drove perpetual funding to roughly -42% and briefly pushed USDe off its peg to around $0.97 before it recovered within hours; analysts pointed to a leverage loop created by exchange-run USDe yield programs as an amplifying factor rather than a flaw in the base mechanism itself. Ethena's insurance fund — built to absorb exactly this kind of stretch — stood at roughly $61 million as of March 2026, or about 1.1% of USDe's total supply at the time. That's a real buffer, but a thin one relative to total supply, and its adequacy through a multi-quarter bear market hasn't actually been tested yet.

Mitigation: Treat sUSDe as one allocation within a treasury, not the whole treasury. A common risk-budgeting heuristic among on-chain treasury teams is to keep yield-bearing, basis-trade-dependent assets under roughly 25% of total stable reserves, with the rest in plain USDC or a T-bill-backed token — precisely so a funding-rate inversion doesn't compromise the project's ability to operate.

Regulatory risk — the section most "Double-Dipping" guides skip entirely. In March 2025, Germany's financial regulator, BaFin, ordered Ethena's German entity, Ethena GmbH, to halt all public offering and redemption of USDe, citing deficiencies under the EU's Markets in Crypto-Assets Regulation (MiCA) — specifically around reserve quality and capital requirements, plus a suspicion that yield-bearing sUSDe constitutes an unregistered security under German law. Ethena wound down its German operations entirely in April 2025, withdrew its MiCA application, and shifted EU-facing matters to an offshore entity (Ethena BVI Limited) following a 42-day redemption settlement with BaFin that closed in mid-2025. The practical upshot: USDe and sUSDe are not currently offered through regulated channels inside the EU/EEA, and any DAO with EU members or EU-domiciled treasury operations should treat that as a real compliance constraint, not a footnote.

Mitigation: If your community or core team has EU exposure, get specific legal guidance before routing treasury funds through USDe/sUSDe, and disclose the jurisdictional limitation yourselves rather than letting holders discover it later.

Liquidity fragmentation. A pool denominated in sUSDe rather than WETH means traders coming in with ETH get routed through an aggregator (1inch, Odos, or similar) rather than swapping directly. On Base's increasingly deep concentrated-liquidity pools this is usually a minor, sub-basis-point cost rather than a real barrier, but it's worth modeling for unusually large trades.

Concentration risk. Don't put 100% of a treasury into any single LP position, no matter how good the underlying yield story looks. Keep a genuinely diversified reserve — some plain USDC, some cold-storage ETH or BTC — so a problem with any one asset doesn't become a problem for the whole project.

8. An Illustrative Model (Not a Real Project)

To make the mechanics concrete: here's a fully hypothetical scenario. There is no real token called $YDOGE, and any resemblance to an actual project is coincidental — treat the numbers as a model, not a forecast.

Imagine a dog-themed memecoin launches a $YDOGE/sUSDe pool with $100,000 in initial backing ($50,000 in $YDOGE, $50,000 in sUSDe).

Month 1 (active market): The token launches into real hype; the pool sees $5 million in trading volume, generating roughly $25,000 in fees at a blended ~0.5% rate. Meanwhile, at a realistic ~8% trailing sUSDe APY, the $50,000 stable side earns roughly $330 that month.

Month 4 (quiet market): Volume drops to $100,000 for the month — trading fees fall to roughly $500. The sUSDe side, assuming the same ~8% APY holds, still earns about $330 that month, regardless of how the token itself is trading. A team that would have had zero treasury inflow in a $TOKEN/USDC pool instead has enough to fund a small community contest or a token buyback.

The point of the model isn't the specific dollar figures — it's the structural difference: a $TOKEN/USDC pool's "off-season" revenue is zero, while a $TOKEN/sUSDe pool's off-season revenue is small but non-zero, funded by something other than your own trading volume.

9. Where This Goes Next: RWAs Enter the Picture

The same logic that extends "idle USDC" into "yield-bearing sUSDe" is now extending toward tokenized real-world assets. The tokenized Treasury category — BlackRock's BUIDL, Franklin Templeton's BENJI, Ondo's OUSG and USDY — has grown into a roughly $7–9 billion segment as of mid-2026, part of a broader tokenized RWA market that crossed $32 billion in May 2026, about triple its size a year earlier. BUIDL alone runs at roughly $2.3–2.5 billion in AUM across several chains, and Ondo's USDY — a retail-accessible, Treasury-backed yield token open to non-US persons — sits around $683 million.

There's also a live signal worth tracking for anyone building credibility into a Base-ecosystem pitch: Ethena and Coinbase launched their first joint product in June 2026, a USDe-powered "High Yield" savings vault (built with SteakhouseFi on Morpho) inside the Coinbase app itself, putting Ethena-derived yield in front of part of Coinbase's retail user base for the first time. That doesn't eliminate any of the risks above, but it's a meaningfully different kind of distribution than "DeFi-native protocol used mostly by people who already use DeFi," and it's worth watching as a signal of where mainstream comfort with this category is heading.

Future frfr.fun launches could plausibly extend the Double-Dipping model toward a Treasury-backed pairing asset like USDY for teams that want materially lower volatility in their yield — Treasury rates move far more slowly than perp funding rates — at the cost of a lower headline number. That's a reasonable direction for the platform to explore, though it isn't a feature that exists today.

10. Conclusion: Pick the Pairing Asset on Purpose

Launching a token in 2026 against an idle USDC pool isn't wrong, exactly — it's simple, liquid, and well understood. But it does leave a real, quantifiable amount of treasury yield on the table relative to a properly staked sUSDe pairing, and "properly staked" is the operative phrase: USDe alone gets you the dollar peg without the yield, sUSDe gets you both, and skipping that distinction is the most common mistake in how this strategy gets pitched.

Pairing through frfr.fun with sUSDe instead of WETH or plain USDC won't insulate a project from every risk — funding rates invert, regulators act, liquidity fragments — but it does give a treasury a second, less-volume-dependent income stream, as long as the team sizes the position sensibly and tells holders the truth about the range of outcomes rather than just the best one.

Sources & Further Reading: Ethena Labs transparency dashboard and official documentation (ethena.fi, docs.ethena.fi); DeFiLlama (USDe/sUSDe supply and yield data); BaFin enforcement notices, as reported by CoinDesk, Cointelegraph, and Finance Magnates (March–June 2025); Aerodrome Finance official documentation (aerodrome.finance, Slipstream fee specification); rwa.xyz and DeFiLlama's RWA dashboard (tokenized Treasury AUM, May 2026); Ethena and Coinbase product announcements (June 2026). Figures are current as of the dates cited inline — DeFi yields and regulatory status move quickly, so re-verify before publishing or deploying capital.

Disclaimer: Cryptocurrency investments, including the use of algorithmic or synthetic stablecoins like USDe and sUSDe, carry significant risk — including smart contract risk, funding-rate-driven yield compression, peg risk during market stress, and jurisdiction-specific regulatory restrictions (USDe and sUSDe are not currently offered through regulated channels in the EU/EEA). This article is for educational and informational purposes only and does not constitute financial, legal, or tax advice. Always do your own research (DYOR) before deploying capital or launching a token on platforms like frfr.fun or Base.