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Ethena Picks BlackRock's BUIDL, Mountain, Superstate and Sky's USDS for $46M Tokenized RWA Investment
The allocation fits into the growing trend of DeFi platforms and protocol foundations investing in real-world asset-backed products to earn a yield without leaving blockchain rails.
Decentralized finance (DeFi) protocol Ethena , issuer of the $2.5 billion yield-generating USDe "synthetic dollar" token, announced Thursday it will invest its $46 million backup fund in BlackRock's and Securitize's tokenized fund BUIDL, Mountain's USDM token, Superstate's USTB and the new USDS stablecoin of Sky, formerly known as Maker.
The protocol's so-called Reserve Fund will allocate roughly $18 million in BUIDL, $13 million in USDS, $8 million in USDM and $7 million in USTB, according to a governance forum post.
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We are pleased to announce the winners of the Reserve Fund RWA Allocation
— Ethena Labs (@ethena_labs) October 10, 2024
After 25 submissions, the Risk Committee decided on 4 assets that stood out across a wide range of criteria:
• BUIDL (Blackrock/Securitize)
• USDS (Sky)
• USTB (Superstate)
• USDM (Mountain) pic.twitter.com/NHyqrICvZZ
USDe generates yield by holding spot bitcoin
and ether while shorting, or selling, equal amounts of BTC and ETH derivatives, harvesting the difference in funding rates. The allocation will allow Ethena to earn a yield on the surplus funds accrued from protocol revenues that serve as an insurance for periods when funding rates turn negative.Ethena's move fits into a growing trend of DeFi platforms and protocol foundations moving part of their treasury assets to tokens backed by real-world assets (RWA) such as U.S. short-term government bonds to earn a yield that's independent from crypto markets without leaving blockchain rails. This trend has helped the tokenized Treasury market triple in size in a year to $2.2 billion, rwa.xyz data shows.
The decision comes after Ethena laid out plans in July to invest its Reserve Fund in RWA-backed products. Some 25 issuers applied for allocation, and the final selection was made by the Ethena Risk Committee, consisting of five voting members of DeFi risk and advisory firms: Gauntlet, Block Analitica, Steakhouse, Llama Risk and Blockworks Advisory, with the Ethena Foundation as a non-voting member.
Future funds accrued in the Reserve Fund will not be invested automatically in those products, that will be a separate decision, an Ethena spokesperson told CoinDesk in email.
Krisztian Sandor
Krisztian Sandor is a U.S. markets reporter focusing on stablecoins, tokenization, real-world assets. He graduated from New York University's business and economic reporting program before joining CoinDesk. He holds BTC, SOL and ETH.
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