The Ethereum stablecoin protocol Ethena announced on Monday the launch of its new stablecoin USDtb, which is supported by BlackRock's tokenized money market fund 'BlackRock USD Institutional Digital Liquidity Fund' (abbreviated: BUIDL), aimed at helping to stabilize the protocol's flagship token USDe when the cryptocurrency market weakens.
The goal of USDtb is to maintain a stable price of 1 dollar, just like other stablecoins, and to invest 90% of its reserves in BUIDL. BUIDL will invest 100% of its total assets in cash, U.S. Treasury bonds, and repurchase agreements, allowing investors to earn returns while holding BUIDL tokens on-chain.
Ethena founder Guy Young stated in a press release: 'Given the rapidly growing market demand for different stablecoin options, we saw a clear opportunity to launch a new product that provides users with a completely different risk profile than USDe, without leaving our trusted ecosystem.'
Ethena is one of the fastest-growing decentralized finance (DeFi) platforms this year, attracting nearly $6 billion in user funds since its public launch in early 2024. The protocol's flagship token, USDe, is positioned as a 'synthetic dollar' that stabilizes around $1, generating returns for investors by shorting perpetual contracts of Bitcoin (BTC), Ethereum (ETH), and SOL to earn funding rates. This investment strategy can provide high yields (currently an annualized yield of 27%) when the cryptocurrency market is in a bull market, but it may quickly become unprofitable when funding rates remain negative due to a shift to a bear market.
The Ethena team explained that the new stablecoin USDtb will enable Ethena to close the derivative positions behind USDe during periods of negative funding rates and will support the reallocation of assets to USDtb, thereby reducing risk. Additionally, the protocol hopes to enable USDtb to be accepted as collateral for margin trading by centralized exchanges in the future.
According to the press release, Ethena has chosen Copper, Zodia Custody, Komainu, and Coinbase Institutional as custodians for USDtb, with liquidity providers including Jump, Cumberland, Amber Group, GSR Markets, and SCB Limited.
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