Ethena Labs Unveils USDtb: New Stablecoin Backed by BlackRock’s BUIDL

Ethena Labs, a rapidly growing decentralized finance (DeFi) protocol, has announced the launch of its second stablecoin, USDtb. Unlike its predecessor, USDe, USDtb is backed by BlackRock’s USD Institutional Digital Liquidity Fund (BUIDL), making it a unique entry in the world of stablecoins.

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What Sets USDtb Apart?

The primary distinction of USDtb lies in its backing. While most stablecoins rely on a combination of cash, commercial paper, or crypto collateral, USDtb’s reserves will be 90% invested in BlackRock’s BUIDL fund. BUIDL is a tokenized money-market fund designed to maintain a stable value of $1 per token, offering "blue-chip" yields on the Ethereum blockchain.

By partnering with BlackRock, the world’s largest asset manager, Ethena introduces an added layer of trust and credibility to its stablecoin. This move follows broader trends in the crypto industry, as major financial institutions like BlackRock seek to integrate tokenized real-world assets into the blockchain ecosystem.

A Dual-Stablecoin Strategy

USDtb is not a replacement for Ethena’s flagship stablecoin, USDe. Instead, it serves as a complementary asset with a distinct value proposition. USDe, known for its robust $1 peg and attractive 27% annualized yield, remains Ethena’s primary offering.
Guy Young, founder of Ethena, explained the rationale behind USDtb’s launch, stating:
“In light of the rapidly accelerating demand for different 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.”

Guy Young, Founder of Ethena
This "two-stablecoin" model allows users to diversify their risk profiles while remaining within the Ethena protocol’s ecosystem. Users can now select a stablecoin based on their yield preferences, market outlook, and tolerance for risk.

Cross-Chain Accessibility and LayerZero Integration

USDtb will be available across multiple blockchain networks, including Ethereum mainnet, Base, Solana, and Arbitrum. This cross-chain compatibility is made possible through Ethena’s integration with LayerZero, a protocol designed to enable seamless cross-chain messaging and token transfers.

The ability to access USDtb on multiple chains significantly enhances its utility, making it accessible to users across various DeFi ecosystems. As multichain interoperability becomes a priority for DeFi protocols, this feature positions USDtb as a future-proof stablecoin.

One of USDtb’s lesser-known but critical roles is its contribution to stabilizing USDe. Ethena’s Risk Committee has approved USDtb as a reserve asset for USDe, allowing the protocol to reallocate reserves to USDtb during periods of negative funding rates. This strategy aims to bolster USDe’s peg stability during market downturns.

This reserve reallocation mechanism offers a proactive response to market volatility, ensuring that USDe’s stability remains intact even in challenging conditions. Ethena’s decision to use USDtb as a backing asset highlights the protocol’s commitment to dynamic risk management.

The Role of BlackRock’s BUIDL

BlackRock’s BUIDL has been making headlines since its launch in March 2024. Built on the Ethereum blockchain, BUIDL is a tokenized version of a traditional money-market fund. It offers the same stability and liquidity as a conventional fund but with the added benefit of blockchain’s transparency and efficiency.

BlackRock’s Head of Digital Assets, Robert Mitchnick, emphasized the company's commitment to blockchain-based solutions, stating:
“[BUIDL] is the latest progression of our digital assets strategy. We are focused on developing solutions in the digital assets space that help solve real problems for our clients.”

Robert Mitchnick, BlackRock’s Head of Digital Assets
This context makes BlackRock’s role in backing USDtb especially significant. Ethena’s choice to integrate BUIDL as its reserve asset provides an added layer of assurance for USDtb holders, as it aligns with BlackRock’s broader strategy to tokenize real-world financial products.

Market Reaction and ENA Token Rally

The launch of USDtb coincides with increased attention on Ethena’s governance token, ENA. Over the weekend, President-elect Donald Trump’s World Liberty Financial reportedly purchased $500,000 worth of ENA, sparking a 25% rally in the token’s value. ENA’s price eventually stabilized at $1.21, with a market cap of $3.5 billion.

The news of Trump’s financial interest in the protocol added a layer of publicity, driving community speculation and excitement. With the introduction of USDtb and growing adoption of USDe, Ethena’s governance token is gaining attention from both retail and institutional investors.