Ethena to Invest $46M Reserve Fund in Tokenized Assets

Decentralized finance protocol Ethena has announced plans to invest $46 million from its Reserve Fund into various tokenized real-world assets (RWAs). The decision was made public on October 10, detailing the allocation of funds into four key tokenized assets, chosen for their potential in the rapidly growing real-world assets market.

Selected Tokenized Assets

Ethena’s investment includes allocations to:

• BlackRock’s USD Institutional Digital Liquidity Fund, a tokenized product from one of the world’s largest asset managers, BlackRock.
• Mountain Protocol’s yield-bearing stablecoin.
• Superstate Short Duration U.S. Government Securities Fund, a tokenized government debt product.
• Sky’s stablecoin, USDS.

|These assets were selected based on several factors, including their maturity, assets under management (AUM) or total value locked (TVL), liquidity, redemption periods, legal structure, and risk-adjusted yield potential.

Breakdown of the Allocations

Ethena provided specific details on how the $46 million will be distributed:

• 40% (approximately $18 million) will be invested in BlackRock’s tokenized fund.
• 29% (about $13 million) will go into Sky’s stablecoin.
• 16.5% (around $8 million) will be allocated to Mountain Protocol’s stablecoin.
• 14.5% (roughly $7 million) will be invested in Superstate’s U.S. government debt fund.

Selection Process

Ethena’s risk committee played a central role in the selection process. The five-member committee includes representatives from Gauntlet, Block Analitica, Steakhouse, Llama Risk, and Blockworks Advisory, all of whom have voting rights. The committee reviewed 25 potential issuers before finalizing these four assets.

This move follows Ethena's earlier announcement in July about its plans to create a real-world asset-backed reserve fund, signaling its intent to diversify into tokenized financial products with strong growth potential.

Conclusion

Ethena’s allocation of its $46 million Reserve Fund across these tokenized assets demonstrates the protocol’s commitment to expanding into real-world asset markets, with careful attention to risk, liquidity, and potential returns. These investments are expected to solidify Ethena’s position within the decentralized finance ecosystem as the market for tokenized real-world assets continues to evolve.