Ethena (ENA) is reportedly preparing to launch a new stablecoin UStb in partnership with real-world asset tokenization (RWA) platform Securitize. The stablecoin will be invested in BlackRock’s USD Institutional Digital Liquidity Fund (BUIDL), a tokenized asset based on the Ethereum blockchain.
BlackRock's BUIDL Fund and its role in UStb
UStb will operate similarly to traditional stablecoins, but the main difference is that UStb’s reserves will be invested in BlackRock’s BUIDL fund. BUIDL invests primarily in U.S. dollars, short-term U.S. Treasuries and repurchase agreements. Since its launch in March of this year, BUIDL has grown rapidly to over $522 million in assets under management, making it the largest tokenized U.S. Treasury bond fund.
The growth of tokenized securities
The market for tokenized government securities has reached over $2 billion, according to data provided by asset manager 21.co, the parent company of Bitcoin ETF provider 21Shares. This growth demonstrates the growing interest and adoption of tokenized assets in financial markets.
Securitize’s contribution to the tokenization ecosystem
As a partner of UStb, Securitize has established a leading position in the tokenization market, facilitating over $950 million in tokenized investments, including tokenizing various asset classes for financial giants such as BlackRock, Hamilton Lane and KKR. fund. Securitize’s partnership with Ethena is part of a larger trend of integrating traditional finance with blockchain technology.
The difference between UStb and USDe
Standalone Products and Unique Risk Profiles
UStb will serve as a "fully independent product" that offers different risk characteristics than Ethena's current stablecoin USDe. According to the Ethena team, UStb will serve as an alternative with a different risk profile, providing users with more stability and diversity.
What is USDe?
Launched in February this year, USDe is described as a synthetic U.S. dollar and quickly became the fifth-largest stablecoin by market capitalization, with a current circulating market capitalization of $2.6 billion. Unlike traditional stablecoins that are backed by fiat currencies or assets, USDe adopts a derivatives hedging strategy, using crypto assets such as Ethereum, Bitcoin, and Solana as collateral, and maintains its peg to the U.S. dollar through arbitrage minting and redemption mechanisms. . This unique structure also enables USDe to generate income through spread trading strategies between spot and futures.
Risks faced by USDe
Despite USDe's stellar performance, there are still some risks, including exposure to derivatives markets, potential counterparty risk, and the volatility of its crypto-asset collateral. These factors could create challenges in maintaining its U.S. dollar peg during adverse market conditions. A crypto market sell-off in August saw USDe liquidate nearly $100 million, with the price briefly falling to $0.997 but later recovering to $1. Additionally, Ethena Labs’ front-end was temporarily disabled after its domain registrar account was compromised.
How does UStb support USDe
UStb is expected to play a role in supporting USDe during difficult market conditions. Ethena's governance team may, if necessary, reduce risk and stabilize USDe's peg by reallocating USDe's backing assets to UStb during periods of negative funding rates.
In addition, Ethena plans to use UStb as margin collateral for the centralized exchanges it partners with, including Bybit and Bitget. This strategy can increase the usage of UStb while providing additional support for USDe.
In February this year, Ethena Labs announced the successful completion of strategic financing, raising US$14 million at a valuation of US$300 million. The financing was co-led by venture capital firm Dragonfly and Maelstrom, the family office of BitMEX founder Arthur Hayes.
This article Ethena partners with Securitize to launch new stablecoin UStb to invest in real-world assets RWA first appeared on Chain News ABMedia.
