Ethena and Securitize Enter $1 Billion Tokenization Contest with USDtb Stablecoin

Stablecoin issuer Ethena has partnered with tokenization platform Securitize to compete in Sky’s prestigious $1 billion tokenization contest. The duo submitted a joint application to include Ethena’s USDtb stablecoin in the competition, which aims to revolutionize real-world asset tokenization.

A Strategic Proposal for Sky’s Spark Competition

Ethena and Securitize’s proposal leverages BlackRock’s tokenized U.S. Treasuries fund, BUIDL, as the primary reserve asset for USDtb. Launched in March 2024, BUIDL stands as the largest tokenized U.S. Treasuries fund by market capitalization, offering robust backing for their stablecoin pitch.

The competition, hosted by Sky—formerly known as MakerDAO—seeks to tokenize $1 billion in public securities through its lending protocol Spark.

Announced in June 2024, Spark’s initiative provides real-world asset issuers an opportunity to secure significant liquidity, with applications opening on August 12, 2024.

Expanding Use Cases for Ethena’s Stablecoins

Beyond proposing USDtb, Ethena and Securitize have suggested introducing a swap facility for Ethena’s secondary stablecoin, USDe. The swap mechanism aims to optimize asset allocation between the two stablecoins in response to Sky’s interest rate adjustments.

According to Ethena Labs, this system would enable seamless reallocation, allowing Sky to shift holdings between USDtb and USDe without friction.

The mechanism offers a faster alternative to the current real-world asset (RWA) issuers used by Sky, particularly during periods of increased crypto funding.

Ethena’s Significant Contribution to Sky’s Revenue

Ethena plays a key role in Sky’s financial ecosystem, contributing approximately $120 million annually—about 30% of the decentralized finance (DeFi) platform’s total earnings. Notably, this revenue is supported by collateral backing of just 13%, demonstrating the efficiency and reliability of Ethena’s approach.

The Road Ahead

As Ethena and Securitize join forces in this groundbreaking competition, their proposal underscores the growing importance of tokenized assets in the DeFi landscape. With robust backing, innovative mechanisms, and a proven track record, their entry into Sky’s $1 billion tokenization contest could set a new standard for integrating real-world assets into decentralized systems.