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Cryptocurrency News Articles
Ethena Labs Introduces New Stablecoin UStb Backed by BlackRock's BUIDL Fund
Sep 28, 2024 at 11:37 pm
Ethena Labs is the developer of the decentralized stablecoin protocol. The platform recently announced its new stablecoin launch, Ustb.
Ethena Labs, the developer of the decentralized stablecoin protocol, has announced the launch of a new stablecoin called Ustb. The stablecoin is backed by BlackRock’s USD Institutional Digital Liquidity Fund (BUIDL).
An offer was made to enhance the partnership agreement between Ethena and BlackRock to securitize digital security and real-world asset tokenization platforms. A synthetic asset was used to collateralize Ethena’s current USDe stablecoin.
UStb will fully function like a traditional asset-backed stablecoin. It is just another product with a different risk profile based on the company’s recent announcement. USDe differs from UStb’s asset-backed model, which uses derivative hedging and cryptocurrency as collateral.
Ethena Labs has collaborated with Blackrock to ensure the stability and credibility of UStb. They want to achieve this aim by utilizing Blackrock’s BUIDL fund. This fund is dedicated to USD, short-term U.S. Treasury bills, and RP agreements, overseeing over $522 Million in tokenized assets.
UStb stablecoin was developed by Ethena Labs as a separate product from USDe. This project ensures that users and exchange partners can choose from a range of stablecoins by seeing more risk profiles. USDe initiated its operation in February 2024. It has managed to hold on to its USD peg.
This development was performed by using an arbitrage-based minting and redemption mechanism. Among other things, collateral in the form of Solana, Ethereum, and Bitcoin was taken.
However, the fact that USDe is active in the futures market. It is susceptible to changes in collateral—particularly in a down market—and presents a possible concern.
USDe uses UStb to modify its backing composition in the event of unfavorable funding conditions to mitigate these risks.
To help the stablecoin weather adverse funding rate conditions, USDe may shift its backing assets to UStb if the governance directs. Thanks to its flexibility, Ethena is better positioned to maintain stability throughout market fluctuations.
Increasing the number of collateral listings on centralized exchanges is another goal of Ethena Labs. That is, on top of its existing collaborations with Bitget and Bybit.
With the introduction of UStb, exchanges, and other users now have a new stablecoin to utilize as margin collateral.
Ethena intends to offer exchange partners two collateral options to help them adjust to changing market conditions. These options include asset-backed UStb and USDe, which are backed by derivatives.
Updates about the UStb launch timeline and new exchange incorporations could shortly come to the limelight. Ethena’s strategy is to expand the acceptance of stablecoins, increasing their accessibility and utility within the crypto ecosystem.
Ethena Labs governance token price has witnessed an excellent surge after the announcement of UStb stablecoin. The ENA price has risen by 15% over the past 24 hours. The token’s price has traveled from $0.307 to $0.378, and the trading volume has increased to $196.1 Million.
Ahead of the UStb announcement, the ENA price rebounded from the bottom, boosting the momentum. It has risen by 19% in a day and has witnessed a significant surge in the trading volume.
The investor’s confidence has grown after the recent surge in the ENA price which enhances the suite of stablecoin products. Ethena has offered USDe stablecoin which has helped to push the market capitalization to $2.60 Billion.
In this article, the views, and opinions stated by the author, or any people named are for informational purposes only, and they don’t establish the investment, financial, or any other advice. Trading or investing in cryptocurrency assets comes with a risk of financial loss.
Disclaimer:info@kdj.com
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