Ethena Launches New Stablecoin USDtb, Backed by BlackRock’s BUIDL Token to Enhance Protocol Stability
Ethena, a leading decentralized finance (DeFi) project, has introduced a new stablecoin, USDtb, designed to offer additional stability for its ecosystem, especially in volatile market conditions. The token will be backed by 90% reserves in BUIDL, the tokenized money market fund issued by BlackRock in collaboration with tokenization firm Securitize. USDtb aims to maintain a stable $1 peg, providing a unique risk profile compared to Ethena’s flagship stablecoin, USDe.
Ethena’s founder, Guy Young, explained in a statement, “With the growing demand for alternative stablecoins, we saw an opportunity to create a product that offers our users a safer, more resilient option without leaving our trusted ecosystem.”
A Response to Market Volatility
Ethena’s flagship token, USDe, generates yield through shorting major cryptocurrencies such as Bitcoin (BTC), Ethereum (ETH), and Solana (SOL), and farming funding rates. This investment strategy yields high returns, currently around 27% annually, in bull markets. However, during market downturns, negative funding rates can render the strategy unprofitable. The launch of USDtb allows Ethena to hedge against these risks by reallocating the reserves from USDe to USDtb during times of negative funding rates, stabilizing the protocol.
Trusted Custodians and Liquidity Providers
Ethena has secured prominent custodians for the new stablecoin, including Coinbase Institutional, Komainu, Zodia Custody, and Copper, ensuring that USDtb’s reserves are safely stored. Additionally, liquidity will be provided by industry giants like Jump Trading, Amber Group, GSR Markets, and SCB Limited, ensuring liquidity for traders and users.
In a move aimed at further expanding USDtb’s utility, Ethena has also applied for inclusion in Sky’s Tokenization Gran Prix program, which aims to invest up to $1 billion into tokenized real-world assets (RWA).
ENA Token Sees Strong Demand
Ethena’s governance token, ENA, experienced a 25% surge in price over the weekend after World Liberty Financial, a DeFi project affiliated with President-elect Donald Trump, invested $500,000 into ENA tokens. The rally continued before slightly retreating on Monday, further increasing ENA’s visibility in the market.
A New Era for DeFi
With nearly $6 billion in user funds since its launch in early 2024, Ethena is rapidly becoming a leader in the DeFi space. The launch of USDtb strengthens the protocol’s ability to provide stability and security during market fluctuations, offering its users a reliable store of value. As Ethena continues to expand its offerings and partnerships, it is well-positioned for long-term success in the ever-evolving DeFi ecosystem.
