Decentralized finance firm Ethena Labs rolled out its new BlackRock BUIDL Fund-backed stablecoin, USDtb, on Dec. 16, amassing $65.4 million in total value locked on the first day.
Ethena’s new USDtb stablecoin will function similarly to Tether (USDT) and USD Coin (USDC) as it is backed by cash or cash equivalents at a 1:1 ratio. It may help holders of Ethena’s flagship product, USDe, “weather difficult market conditions.”
“Ethena will be able to close the hedging positions underlying USDe and re-allocate its backing assets to USDtb to further ameliorate related risks,” Ethena Labs said in a Dec. 16 announcement.
Source: Ethena Labs
USDtb has received praise from José Maria Macedo, one of the founders of blockchain research and development firm Delphi Labs, who predicted that USDtb will become the largest tokenized treasury product within one month of launch.
Ethena’s head of growth, Seraphim Czecker, said USDtb has the potential to scale to $100 billion because the firm can now effectively allocate capital in bearish environments by “creating an APY ‘floor’ around the T-Bill rate.”
The stablecoin is 90% backed by BlackRock’s USD Institutional Digital Liquidity Fund in partnership with blockchain tokenization firm Securitize.
One of Ethena’s committee members, Block Analiticia, noted in the now-approved proposal that stablecoins like USDC would make up the remaining 10% of USDtb’s reserves, which can help provide additional liquidity over weekends or other times when US Treasury bill markets are unavailable.
Now tracking @ethena_labs USDtb on @ethereum
— DefiLlama.com (@DefiLlama) December 16, 2024
USDtb is an independent, bankruptcy-remote USD stablecoin issued by Pallas (BVI) Ltd., backed by institutional custodial investments and tokenized U.S. treasury funds pic.twitter.com/9Y9XuCs1qD
The “core” of USDtb’s smart contracts passed three full audits from Pashov, Quantstamp and Cyfrin in October with no high or medium-level findings.
USDtb was given the green light after being approved by Ethena’s risk committee in late September, though details weren’t finalized until earlier this month.
Cointelegraph reached out to Ethena Labs for comment but received no response by the time of publishing.
Related: Ethena dismisses inaccurate claims over ENA token staking
It comes as Ethena’s USDe stablecoin recently surpassed Dai (DAI) to become the third-largest stablecoin, trailing only USDT and USDC.
However, USDe’s market cap of $5.87 billion is still far behind USDT and USDC’s market cap of $140.6 billion and $42.1 billion, respectively, DefiLlama data shows.
The stablecoin market cap recently surpassed $200 billion, and crypto asset manager Bitwise predicts that number to double to $400 billion in 2025, citing the likely passing of stablecoin legislation in the US.
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