On September 26, 2024, Ethena Labsannounced the launch of its new stablecoin, UStb, backed by BlackRock’s USD Institutional Digital Liquidity Fund (BUIDL). This initiative represents a strategic collaboration with Securitize, aimed at enhancing the stablecoin landscape. Ethena Labs asserts that UStb will provide a safer and more stable alternative compared to its existing synthetic dollar stablecoin, USDe.
We are excited to announce Ethena's newest product offering: UStb
UStb will be fully backed by @Blackrock BUIDL in partnership with @Securitize, enabling a separate fiat stablecoin product alongside USDe
Ethena Labs’ new stablecoin, UStb, is designed to anchor its value in liquid assets, primarily utilising BlackRock’s tokenized fund. BUIDL is distinguished by its backing of US dollars, short-term US Treasury bills, and repurchase agreements, positioning it as a safer investment choice. Since its launch earlier this year, BUIDL has amassed over $513 million in assets, marking it as the largest tokenized US Treasuries fund.
Securitize is proud to partner with @ethena_labs for the planned launch of UStb, a new stablecoin which intends to invest its reserves in @BlackRock’s tokenized U.S. Treasuries fund, BUIDL.
As the largest tokenized U.S. Treasuries fund with over $522 million in assets, BUIDL… pic.twitter.com/vUotXe6PJZ
“We aim to provide a product with a different risk profile compared to USDe,” Ethena Labs explained. This shift comes in response to the growing community concerns regarding USDe’s performance during adverse funding conditions.
Addressing Concerns with USDe
Ethena Labs noted that USDe has performed well despite recent bearish market conditions, not experiencing a single week of negative funding over the last six months. However, the team acknowledged potential vulnerabilities related to market volatility and interest rate changes.
To mitigate these risks, Ethena Labs indicated that USDe could benefit from the incorporation of UStb, particularly during weak funding conditions. “If governance deems it necessary and appropriate, we can close hedging positions and re-allocate backing assets to UStb,” the company stated.
Expansion into Centralised Exchanges
Moreover, Ethena Labs is keen on expanding its collateral offerings beyond current integrations with centralized exchanges such as Bybit and Bitget. This move aims to provide exchange partners with distinct products for margin collateral, thereby increasing market options.
Lastly, as Ethena expands into CEX collateral offerings beyond the current integrations with @Bybit_Official and @bitgetglobal it can offer exchange partners the choice of two distinct products for margin collateral
We will be sharing an update on a new UStb timelines shortly…
The company has committed to providing updates on new exchange integrations and UStb’s launch timeline in the near future.
Positive Market Reception
The announcement of UStb has had a favourable impact on Ethena’s governance token, ENA, which surged by 13.29% following the news. ENA’s trading volume reached approximately $196.1 million, indicating heightened market interest.
“This innovation arrives at a transformative moment for Ethena,” remarked the company, reflecting on the potential of UStb to reshape their stablecoin offerings.
Conclusion
With the introduction of UStb, Ethena Labs seeks to reinforce its position in the stablecoin market by providing a product that addresses the challenges faced by its existing USDe. As the cryptocurrency landscape continues to evolve, UStb’s backing by BlackRock’s BUIDL may set a new standard for stability in the digital asset space.
