Ethena Labs launches stablecoin backed by BlackRocks tokenized fund shares
Ethena Labs announced the launch of its USDtb stablecoin, which will leverage BlackRocks tokenized fund, USD Institutional Digital Liquidity Fund (BUIDL), for 90% of its backing.
According to the Dec. 16 announcement, the partnership was facilitated by Securitize.
USDtb will operate independently from Ethenas existing algorithmic stablecoin, USDe, providing users and exchange partners with a stablecoin featuring a differentiated risk profile. Ethenas Risk Committee has also approved USDtb as a potential backing asset for USDe, enhancing its ability to navigate volatile market conditions.
USDtb design provides flexibility and risk mitigation across Ethenas ecosystem and beyond, as Sparks $1 billion Tokenization Grand Prix touts directing incentives towards the stablecoin. The initiative will boost tokenization efforts.
Additionally, USDtb is inherently multichain, built as LayerZeros Omnichain Fungible Token (OFT). Users can transfer USDtb across various blockchains, such as Ethereum, Base, Solana, and Arbitrum.
USDtbs liquidity will be supported by prominent market makers, including Jump, Cumberland, Wintermute, Amber, GSR, and SCB Limited.
Notably, Ethena Labss move represents a significant step forward for stablecoins, which combine the stability of traditional finance with the efficiency and scalability of blockchain. BlackRocks BUIDL currently has a market cap of nearly $562 million.
Furthermore, it solidifies Ethenas position in the stablecoin market following the success of its algorithmic stablecoin USDe, which grew 93% over the past 30 days to hit a $5.6 billion market cap making it the third-largest stablecoin in the market.
The growth could be closely tied to its value accrual mechanism, which is giving USDe stakers a 27% annual percentage yield (APY) as of press time.
TradFi meets DeFi
In addition to Ethena Labs, other DeFi protocols are also considering tapping into BUIDL.
Money market platform Aave proposed a new GHO Stability Module (GSM) on Aug. 26 based on BlackRocks tokenized fund. Aave created the GSM to help maintain the peg of its ecosystems stablecoin, GHO.
Meanwhile, BlackRock plans to expand its BUIDL offering for traditional finance giants. The asset manager is considering using the shares of its tokenized fund as collateral for derivatives trading.
Such a move would connect the trillion-dollar derivatives market to the nascent tokenized money funds sector, which is roughly $3 billion in size as of Dec. 16.
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