Ethena’s New Stablecoin USDtb Achieves $65M in Total Value Locked on Launch Day

Ethena Labs, a decentralized finance (DeFi) firm, has launched its highly anticipated stablecoin, USDtb, with impressive success. The new token, backed by the BlackRock BUIDL Fund, garnered over $65 million in total value locked (TVL) on its opening day, marking a significant milestone for the company.

USDtb is designed to function similarly to well-known stablecoins like Tether (USDT) and USD Coin (USDC), being pegged 1:1 with cash or cash-equivalent assets. This new stablecoin offers a stable alternative to users looking for protection against market volatility, particularly holders of Ethena’s flagship product, USDe. The stablecoin is backed primarily by BlackRock’s USD Institutional Digital Liquidity Fund in collaboration with blockchain tokenization firm Securitize, ensuring its reliability in today’s evolving market.

The introduction of USDtb is seen as a strategic move by Ethena Labs to offer a more resilient product during challenging market conditions. Ethena plans to utilize the stablecoin to provide additional security for users of USDe by closing hedging positions and reallocating its backing assets. This shift allows Ethena to better manage risks and mitigate potential losses in adverse market environments.

Industry Experts Weigh In

USDtb has already received praise from several figures within the blockchain and DeFi spaces. José Maria Macedo, co-founder of blockchain research firm Delphi Labs, forecasted that USDtb could rapidly rise to become the largest tokenized treasury product within a month of launch. Meanwhile, Ethena's head of growth, Seraphim Czecker, expressed confidence in USDtb’s potential to scale to $100 billion in value. Czecker highlighted the stablecoin's capacity to create an annual percentage yield (APY) “floor” tied to the U.S. Treasury bill rate, positioning it to thrive even in bearish market conditions.

The stablecoin’s success is backed by solid infrastructure and governance. USDtb’s core smart contracts underwent rigorous audits from Pashov, Quantstamp, and Cyfrin in October, with no major security concerns identified. The proposal for USDtb was approved by Ethena’s risk committee in late September, ensuring that the project meets stringent regulatory and operational standards.

Strategic Reserves and Liquidity

USDtb’s reserves are predominantly composed of BlackRock’s USD Institutional Digital Liquidity Fund, which makes up 90% of the backing. The remaining 10% is allocated to other stablecoins like USDC, ensuring liquidity during periods when U.S. Treasury bill markets may be less accessible, such as weekends or holidays.

This strategic approach aims to address a key challenge in stablecoin liquidity management, offering users more flexibility and ensuring that USDtb remains a reliable asset in the crypto space.

Ethena’s Growing Influence in the Stablecoin Market

The launch of USDtb comes on the heels of Ethena’s success with its USDe stablecoin, which recently surpassed Dai (DAI) to become the third-largest stablecoin by market cap. While USDe's market cap of $5.87 billion still trails far behind industry giants like USDT and USDC, it has solidified Ethena’s position as a major player in the DeFi ecosystem.

According to data from DefiLlama, the total stablecoin market cap has now surpassed $200 billion, with projections from crypto asset manager Bitwise suggesting it could double to $400 billion by 2025, particularly with the likely passage of stablecoin legislation in the U.S. Ethena's strategic entry into the market with USDtb positions the firm for further growth as the stablecoin sector expands.

As the market continues to evolve, Ethena’s USDtb stands as a promising new entrant, combining robust backing, liquidity solutions, and growth potential to cater to the needs of crypto users seeking stability in volatile times.