Ethena has launched its new stablecoin, USDtb, backed primarily by BlackRock’s BUIDL fund. The stablecoin will hold over 90% of its reserves in BUIDL, a tokenized money market fund that invests in U.S. government debt, cash, and repos, with the remaining reserves held in stablecoins and tokenized Treasury products. USDtb will function similarly to traditional stablecoins like USDC and USDT, where every issued token is backed by reserve assets.
Ethena’s existing product, USDe, is a synthetic dollar that maintains its dollar peg through a derivative-based “delta-neutral” strategy. USDe relies on funding rate differences in spot and futures markets but can face challenges when funding rates turn negative. USDtb is designed to reduce this risk by acting as a reserve asset for USDe during unfavorable market conditions. “The hedges would be closed and the BTC or whatever is replaced with USDtb,” said Zack Rosenberg, general counsel at Ethena Labs, explaining that USDtb’s structure avoids exposure to negative funding rates.
Ethena’s founder, Guy Young, said the new product addresses growing demand for stablecoin options. “We saw a clear opportunity to provide a new product that offers users an entirely different risk profile from USDe without them having to leave our trusted ecosystem,” Young said.
USDtb reserves will be managed by Pallas, a BVI-based entity that conducts AML checks and screenings for whitelisted users. Ethena Labs will act as a service provider to Pallas, with an Ethena subsidiary overseeing investment management. Custodians for the reserves include Copper, Zodia Custody, Komainu and Coinbase Institutional.
The stablecoin has also been submitted for Sky’s Tokenization Grand Prix, a $1 billion program aimed at supporting tokenized real-world assets. If accepted, USDtb and USDe could integrate seamlessly, allowing for easier allocation management in response to changing interest rates. Ethena also plans to propose USDtb as collateral for margin trading on centralized exchanges.
USDtb underwent three independent security reviews by Pashov, Quantstamp, and Cyfrin in October, with no major issues found. Liquidity providers for the new stablecoin include Jump, Cumberland, Amber Group, GSR Markets and SCB Limited.
Ethena has experienced rapid growth since its launch earlier this year, attracting over $6 billion in user funds. USDe remains the third-largest USD-denominated crypto asset, with a total value locked exceeding $5 billion. Ethena’s governance token, ENA, also saw a recent boost when World Liberty Financial, a DeFi project linked to President-elect Donald Trump, purchased $500,000 worth of ENA over the weekend, causing a 25% price surge before stabilizing on Monday.
BlackRock’s BUIDL, launched in partnership with Securitize, is the largest tokenized fund of its kind, traded across blockchains including Ethereum, Arbitrum, Avalanche and Polygon. By tapping into BUIDL, Ethena aims to strengthen USDtb as a stable and reliable asset while differentiating it from its existing products.