Ethena Labs and BlackRock to Launch New Stablecoin UStb

Ethena Labs has joined forces with BlackRock to unveil a groundbreaking stablecoin, UStb (USTB). This new offering will harness BlackRock’s tokenized USD Institutional Digital Liquidity Fund (BUIDL), which holds a stable value of $1 per token. UStb will complement Ethena’s existing synthetic stablecoin, USDe (USDE), providing users with a fresh, reliable option in the crypto space.

Finally – some good news! Here are more details on this.

Understanding UStb

UStb will bring a unique twist to Ethena’s stablecoin lineup, providing a distinct product with a different risk profile than USDe. While USDe has weathered tough market conditions since its launch, the introduction of UStb will further stabilize the ecosystem, especially during periods of weak funding rates. The team said that the emergence of UStb will indirectly benefit Ethena USDe because if the market conditions are really bad and the funding rate goes negative, it may consider using a governance mechanism to close the USDe hedging position and gradually switch to adding UStb.

The team also said that they are working with Bybit, Bitget to allow UStb to be used as margin collateral. Following the announcement, Ethena’s token ENA jumped 16%, reflecting strong market interest.

Dual Stability with USDe & UStb

Ethena Labs aims to create a flexible system where USDe and UStb can work together. During unfavorable funding conditions, USDe will automatically adjust its backing by incorporating UStb, offering a stable solution in various interest rate environments. This dual approach ensures that users continue to benefit from both products, keeping the ecosystem robust and adaptable.

With UStb’s introduction, Ethena Labs is reinforcing its platform’s resilience. By combining the synthetic reliability of USDe with the liquid stability of UStb, Ethena is well-prepared to face future market challenges while offering users greater flexibility and security.

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Could UStb be a game-changer for DeFi? Share your predictions.