USDtb: A New Stablecoin Levering BlackRock's Tokenized Funds

This article examines USDtb's unique structure, its relationship with Ethena's existing USDe stablecoin and the way it bridges traditional finance with

Stablecoins have become a cornerstone of the crypto ecosystem, offering stability in a market known for its volatility. Among recent innovations is USDtb, a new stablecoin from Ethena Labs that leverages BlackRock's tokenized funds to create a reliable digital dollar alternative.

This article examines USDtb's unique structure, its relationship with Ethena's existing USDe stablecoin and the way it bridges traditional finance with decentralized systems to offer a differentiated risk profile for both retail and institutional users.

Key Takeaways:

USDtb is a blockchain-based USD stablecoin primarily backed by BlackRock's BUIDL tokenized treasury fund, offering institutional-grade stability with 24/7 accessibility in volatile market conditions.

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What is USDtb?

USDtb is a blockchain-based USD stablecoin primarily backed by the BlackRock BUIDL tokenized treasury fund and provides institutional-grade stability with 24/7 accessibility in volatile market conditions.

Launched in December 2024 by Ethena Labs, USDtb follows a traditional fully-backed stablecoin model, where each token represents one US dollar, ensuring value stability and transparency through a direct 1:1 backing relationship.

Eighty percent of USDtb reserves are invested in the BlackRock USD Institutional Digital Liquidity Fund (BUIDL), which holds cash, repurchase agreements and US Treasury instruments. The remaining 2% is held in stablecoins such as USDC, to maintain immediate liquidity during weekends or holidays when traditional treasury markets are closed.

What is Ethena?

Ethena (ENA) is a DeFi protocol built on Ethereum and known for USDe, its innovative synthetic dollar. The Ethena protocol bridges traditional finance with decentralized systems through sophisticated financial engineering and institutional partnerships.

Generally based on Arthur Hayes's early 2023 "Dust on Crust" blog post, Ethena has quickly become a major player in the stablecoin ecosystem. The protocol uses delta-neutral strategies that pair spot crypto assets with corresponding short positions on derivatives exchanges, enabling impressive revenue while maintaining stability.

The Ethena ecosystem is governed by its native ENA token. With the introduction of USDtb, Ethena expands its offerings to include a fully-backed stablecoin supported by BlackRock's institutional-grade BUIDL fund, diversifying its solutions to suit different market conditions and users.

What is BlackRock's BUIDL?

BlackRock's USD Institutional Digital Liquidity Fund (BUIDL) is a tokenized money market fund that invests in dollar-equivalent assets, such as cash, US Treasury bonds and repurchase agreements. Developed in partnership with Securitize, a leading real-world asset tokenization company, BUIDL represents BlackRock's entry into the tokenized treasury space.

BUIDL is cross-chain compatible, operating across multiple blockchains including Ethereum, Arbitrum, Avalanche and Polygon. As the largest tokenized fund of its kind, BUIDL provides institutional-grade backing for USDtb, lending credibility to the stablecoin through BlackRock's established reputation in traditional finance.

What does USDtb aim to achieve?

USDtb represents Ethena's strategic approach to creating a more resilient ecosystem that can withstand various market conditions, while bridging the gap between DeFi innovation and traditional financial systems. Some of its key aims include:

Risk diversification: USDtb provides an alternative to Ethena's USDe during unfavorable market conditions. When funding rates for USDe turn negative in bear markets, Ethena can close its hedging positions and reallocate assets to USDtb, maintaining stability within its ecosystem.

Traditional finance integration: Using BlackRock's BUIDL fund, USDtb bridges institutional finance and cryptocurrency markets, potentially attracting traditional finance (TradFi) entities who are hesitant to engage with cryptocurrencies.

Stability enhancement: USDtb's direct backing by treasuries provides a straightforward stability mechanism that's easier to understand and performs reliably even during times of extreme market stress.

Ecosystem expansion: USDtb expands Ethena's product suite, allowing users to remain within the Ethena ecosystem — even when they are seeking different risk profiles, or during changing market conditions.

How does USDtb work?

USDtb operates as a blockchain-based stablecoin through a sophisticated infrastructure designed for independence, transparency and security. Unlike traditional dollars, USDtb enables faster and cheaper transactions while maintaining stability through institutional-grade backing.

The minting and redemption process occurs through a smart contract system with strict controls. Only verified users who pass comprehensive KYC/AML checks can mint or redeem USDtb directly. The system's safeguards include maximum mint/redeem limits per block and whitelisted custodian addresses to prevent manipulation.

For transparency, USDtb maintains visible on-chain wallets and publishes monthly fund administrator NAV reports. Holders can use USDtb just as any digital dollar