Ethena Labs Launches New Stablecoin USDtb Backed by BlackRock's Tokenized Fund BUIDL

On December 16, the DeFi project Ethena Labs announced the official launch of its new stablecoin USDtb. As a blockchain-based dollar stablecoin, 90% of USDtb's reserve funds are invested in BlackRock's tokenized fund BUIDL

DeFi project Ethena Labs announced on Friday the official launch of its new stablecoin USDtb. The dollar stablecoin is backed by BlackRock's tokenized fund BUIDL in collaboration with leading real asset tokenization company Securize.

According to DefiLlama data, USDtb's TVL reached $64.5 million on its first day of launch. Previously, Ethena CEO Guy Young predicted that USDtb's TVL would reach between $500 million and $1 billion in its first month. He also mentioned that some TradFi entities, despite not fully engaging with other cryptocurrencies, already have significant exposure to Ethena's activities.

Backed by BlackRock's BUIDL Fund, Countering Market Volatility in Bear Markets

The newly launched USDtb is a relatively traditional crypto stablecoin, appearing nearly identical to USDC and USDT. The only distinction is that Ethena utilizes BlackRock's BUIDL treasury fund as collateral to support this stablecoin. BUIDL is a tokenized fund that invests in assets pegged to the dollar (such as cash, U.S. Treasury bonds, and repurchase agreements). Ethena does not manage financial assets directly but entrusts them to various banks or service providers in the real world. In essence, BlackRock and Securitize handle the entire process. Therefore, USDtb operates on a completely different product principle than Ethena's flagship stablecoin USDe.

USDtb will act as an alternative stablecoin for Ethena, absorbing funds from USDe during extreme market conditions. In a recent appearance on the Unchained podcast, Ethena CEO Guy Young explained that USDtb is very similar to regular stablecoins and does not generate yield itself. As a result, retail users purchasing it will not earn returns like they would with treasury bond funds. He stated that the two products actually work in parallel, and in 98% of cases, when cryptocurrency exchange rates appear more attractive than traditional financial rates, USDe operates as it does now. Then, as the environment changes (such as entering a bear market), users always retain the option to close (positions) and move into USDtb, keeping their balance sheet in their own products.

Thus, USDtb may help USDe holders "navigate challenging market conditions." In its December 16 announcement, Ethena Labs stated: "Ethena will be able to close the hedging positions behind USDe and reallocate its supporting assets to USDtb to further mitigate related risks."

This stablecoin is 90% backed by BlackRock's BUIDL and is created in collaboration with the blockchain tokenization company Securitize. One of Ethena's committee members, Block Analiticia, noted in an already approved proposal that stablecoins like USDC will make up the remaining 10% of USDtb's reserves, which can provide additional liquidity during weekends or other periods when treasury markets are not trading. The "core" part of USDtb's smart contract passed three complete audits by Pashov, Quantstamp, and Cyfrin in October.

USDtb May Drive Significant Capital Inflow from TradFi

Launched in February this year, Ethena Lab's synthetic stablecoin USDe has experienced rapid growth, ranking as the third-largest stablecoin after USDT and USDC. In just a month and a half, since November 1, its market capitalization has more than doubled to nearly $6 billion, even surpassing DAI, a long-established DeFi native stablecoin.

The key to USDe's success lies in the yield it offers. The token has an annual yield of 27%, far exceeding the 12.5% offered by DAI and USDS. USDe is created by depositing Bitcoin, Ethereum, or Solana into the Ethena protocol and then opening short positions on futures exchanges like Bybit. This creates what is known as a "delta-neutral" position, where the value of the assets and the short positions offset each other, maintaining overall price stability.

Currently, as most traders hold a bullish view on cryptocurrencies, they pay funds to Ethena to short, and the protocol passes these funds on to USDe holders through staking. As long as this situation continues, USDe's yield should remain high. However, if traders turn bearish, Ethena will not be able to provide such high yields.

Moreover, Staked USDe (sUSDe) is a yield token from Ethena that enables users to earn additional returns by staking USDe tokens. Through staking rewards and basis trading strategies, sUSDe offers high yields to holders.

Blockworks Research recently Tweeted about the different ways Ethena is being primarily used. Pendle is the preferred destination for Staked USDe with over $1 billion in assets, followed by Aave. In a recent appearance on the Unchained podcast, Ethena CEO Guy Young