The Rise of DeFi Yield Strategies in a Bull Market: Leveraging sUSDe and JLP for High APY Opportunities

The crypto market's ascent into a new bull cycle has reignited interest in decentralized finance (DeFi) protocols, which now offer sophisticated tools for capital efficiency and risk management. Among the most promising are Ethena's synthetic dollar (sUSDe) and Kamino's JLP (Jupiter Liquidity Provider) Multiply strategy. These protocols exemplify how DeFi is evolving to deliver high annual percentage yields (APYs) while navigating the inherent volatility of crypto markets. For investors seeking to maximize returns during upcycles, understanding the risk-adjusted returns and strategic advantages of these protocols is critical.

Ethena's sUSDe: Conservative Stability in a Bull Market

Ethena's sUSDe, a staked version of its synthetic stablecoin USDe, has emerged as a cornerstone of risk-averse yield strategies. By May 2025, USDe's supply had surged by $500 million in just two weeks, driven by favorable funding rates and a strategic reallocation of backing assets. The protocol's backing ratio of 101.87%—with a $61.1 million Reserve Fund—demonstrates robust risk management. However, the APY spread for sUSDe versus benchmarks has averaged 2.79%, below the 5–7.5% range typically sought by yield-hungry investors.

The key to sUSDe's appeal lies in its conservative governance and institutional-grade backing. In May 2025, Ethena integrated Aave's aUSDC and aUSDT as collateral assets, with supply caps ensuring exposure remains within 10% of total liquidity on Aave. This cautious approach limits downside risk, making sUSDe a safer harbor during market turbulence. Additionally, the launch of USDtb, a stablecoin backed by BlackRock's USD Institutional Digital Liquidity Fund, signals growing institutional trust in Ethena's ecosystem.

For investors prioritizing capital preservation, sUSDe's APY may appear modest. Yet its low volatility and governance-driven risk controls make it a compelling choice in a bull market, where liquidity demand often outpaces supply. The protocol's Season 4 Rewards Program, which aims to distribute 3.5% of sENA tokens to stakers, further incentivizes long-term participation.

Kamino's JLP Multiply Strategy: High Leverage, High Risk

Kamino's JLP Multiply strategy, on the other hand, caters to risk-tolerant investors seeking aggressive returns. By leveraging the Jupiter DEX's liquidity provider token (JLP)—a basket of wBTC, ETH, SOL, and stablecoins—Kamino enables users to amplify their exposure to trading fees. As of late 2024, JLP had generated 36.77% APR in fees, while borrowing costs via Kamino averaged 13%. This 23.77% spread, combined with JLP's 38.5% price appreciation since July 2024, has allowed leveraged positions to achieve net returns exceeding 72% annually.

However, the strategy's risks are nontrivial. JLP Multiply positions rely on maintaining a Loan-to-Value (LTV) ratio below liquidation thresholds, which tighten during volatility. In February 2025, the JLP market experienced its first significant liquidations, with $10 million in collateral seized as the collateralization ratio dipped to 165%. While Kamino's updated risk parameters handled the stress without systemic failure, the event underscored the fragility of leveraged positions.

The strategic advantage of JLP Multiply lies in its ability to harness the fee-driven growth of Solana's DEX ecosystem. For investors with a high risk appetite, the protocol's aggressive capital efficiency—coupled with real-time liquidation monitoring tools—can yield outsized returns. Yet, the trade-off is clear: higher leverage amplifies both gains and losses, requiring constant vigilance.

Comparative Analysis: Risk-Adjusted Returns

To evaluate these protocols, one must balance APY with downside risk. sUSDe's conservative design ensures stability but caps upside potential. Kamino's JLP strategy, while riskier, offers a higher reward-to-volatility ratio, assuming investors can manage liquidation risks.

A key differentiator is governance. Ethena's 99.7% community approval for risk management proposals (e.g., Aave integration, USDtb onboarding) reflects a mature, data-driven approach. Kamino, meanwhile, relies on dynamic risk parameters that adjust in real-time, a model better suited for experienced DeFi participants.

Investment Advice for a Bull Market

In a bull market, liquidity demand surges, creating opportunities for protocols like Ethena and Kamino. For risk-averse investors, sUSDe's APY may serve as a stable base for capital preservation, while its governance-driven risk controls provide a safety net. For those with higher risk tolerance, JLP Multiply offers a way to amplify returns, provided they maintain conservative leverage ratios and closely monitor LTV metrics.

A diversified approach—allocating a portion of capital to sUSDe for stability and another to JLP Multiply for growth—could optimize risk-adjusted returns. However, investors must remain agile, as market conditions can shift rapidly. The recent Bitcoin price surge, for instance, has driven demand for DeFi yield strategies, but a correction could trigger liquidity crunches.

Conclusion

DeFi's evolution into a sophisticated asset class is evident in protocols like Ethena and Kamino, which offer tailored solutions for different investor profiles. While sUSDe prioritizes stability and institutional trust, JLP Multiply leans into the high-risk, high-reward dynamics of Solana's DEX ecosystem. In a bull market, both protocols have a role to play—provided investors align their strategies with their risk tolerance and liquidity needs. As the crypto market matures, the ability to navigate these nuanced yield strategies will separate the successful from the speculative.