Ethena Labs Launches USDtb Stablecoin Backed by BlackRock Liquidity Fund

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Hassan Shittu

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Hassan Shittu

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December 16, 2024

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Ethena Labs has introduced a new stablecoin, USDtb, which is backed by reserves invested in BlackRock’s USD Institutional Digital Liquidity Fund (BUIDL).

The launch was carried out in partnership with Securitize, a leader in the tokenization of real-world assets.

Ethena Labs Expands Stablecoin Use Cases: USDtb Considered for CEX Collateral and Tokenization

According to the announcement on Monday, USDtb functions similarly to established fiat-backed stablecoins like USDC and USDT, maintaining a 1:1 reserve ratio using cash or cash-equivalent assets.

The stablecoin allows unrestricted transfers, offering users flexibility and accessibility.

A distinguishing feature of USDtb is its scalability, made possible by BlackRock’s BUIDL fund, which constitutes 90% of USDtb’s reserves.

The remaining 10% consists of stablecoins and institutional-grade tokenized U.S. Treasury products, facilitating redemptions and liquidity.

This represents the highest allocation to BUIDL among any stablecoin currently on the market.

Unlike Ethena’s other stablecoin, USDe, USDtb is an entirely independent product designed to meet diverse user needs and exchange requirements.

Its distinct risk profile provides an alternative to USDe while also supporting USDe’s stability in challenging market conditions.

Ethena’s Risk Committee recently approved a proposal to use USDtb as a backing asset for USDe.

Ethena plans to reallocate assets from USDe to USDtb during negative funding rates to mitigate risks and improve resilience.

USDtb leverages LayerZero technology, enabling seamless cross-chain transfers across multiple networks.

At launch, USDtb will be available on Ethereum mainnet, Base, Solana, and Arbitrum. It will also be bridgeable via Stargate for enhanced interoperability.

The stablecoin’s infrastructure has been extensively audited to ensure security and compliance.

Leading auditors, including Quantstamp, Cyfrin, and Pashov, completed three full audits of the core USDtb smart contracts in October, with no high or medium-level vulnerabilities detected.

Additionally, a community-driven audit by Code4rena reported no significant findings.

Ethena has partnered with several prominent institutions to support USDtb’s launch. Copper, Zodia, Komainu, and Coinbase Web3 Wallet provide custody solutions.

Liquidity providers include Jump, Cumberland, Wintermute, Amber, GSR, and SCB Limited.

USDtb is also being evaluated for broader use cases. It is under consideration as margin collateral on centralized exchanges that have partnered with Ethena and for allocation in Spark’s $1 billion Tokenization Grand Prix.

How USDtb’s Launch Expands Ethena’s Stablecoin Ecosystem and Boosts User Choice

USDtb has been submitted for Spark’s $1 billion Tokenization Grand Prix, a competition to boost liquidity for tokenized assets.

If selected, USDtb could see a significant increase in adoption and utility.

Ethena’s proposal includes mechanisms for swapping between USDtb and USDe, potentially improving allocation strategies in response to market conditions.

With USDtb’s launch, Ethena Labs aims to expand its stablecoin offerings while providing users with a diversified, secure, and scalable product.

CoinGecko recently reported that Ethena’s USDe market capitalization surpassed $4.3 billion as of Nov. 29. CCData’s analysis attributes this growth to increased interest in the Ethena ecosystem, driven by its proposal to introduce revenue sharing for Ethena (ENA) token holders.