Ethena recommends allocating funds into tokenized physical assets to earn yield, a strategy that has previously been adopted by cryptocurrency lender MakerDAO and the developers of Ethereum second-layer solution Arbitrum.
Ethena has revealed a plan to allocate a portion of its $235 million in $USDT stablecoin collateral and $45 million in surplus reserves to yield-generating real asset (RWA) products. BlackRock's BUIDL fund is seeking a $34 million allocation, while Steakhouse Financial has also applied for a lending vault on the Morpho Blue platform.
Ethena’s managed “synthetic dollar” token $USDe, which has generated $3.4 billion in revenue, plans to invest part of its reserves in tokenized real assets, and BlackRock’s BUIDL fund is one of the first applicants to compete. The protocol clarified its plans in a governance post published on July 16, including allocating approximately 7% of its $235 million $USDT holdings, as well as $45 million in surplus reserves. Ethena generates revenue for investors by buying and shorting perpetual swaps of spot Bitcoin and Ethereum on cryptocurrency exchanges, thereby achieving financing rates for funds.
BlackRock’s BUIDL, an Ethereum-based, token-represented money market fund, is seeking $45 million from Ethena, according to a Monday post by Jonathan Espinosa of tokenization platform Securitize, BUIDL’s distribution partner. Received an allocation of US$34 million from US dollar reserves. On the same day, Steakhouse Financial also applied to DeFi platform Morpho Blue for a USDC lending vault collateralized by wrapped bitcoin, wrapped pledged ether and Backed’s tokenized treasury bill product (bIB01).
Michael Carrica, the founder of Mountain Protocol, the issuer of the USDM yield-based stablecoin, has also expressed interest in applying. He mentioned in a governance post last week that the protocol "will present a proposal in the next few days."
Guy Young, founder of Ethena Labs, stated in an email that all potential applicants are required to publicly post their proposals in the governance forum.
Ethena’s public competition is the latest example of the increasing use of tokenized physical assets in the crypto-native decentralized finance (DeFi) industry. Recently, DeFi lender MakerDAO announced plans to invest $1 billion of assets backed by its $DAI stablecoin into tokenized treasury products, while Ethereum second-layer ecosystem developer ArbitrumDAO also completed an allocation equivalent to $35 million Competition for tokenized products of ARB tokens.
[Disclaimer] There are risks in the market, so investment needs to be cautious. This article does not constitute investment advice, and users should consider whether any opinions, views or conclusions contained in this article are appropriate for their particular circumstances. Invest accordingly and do so at your own risk.
This article is reprinted with permission from: "MarsBit"
Original author: Krisztian Sandor
