YZi Labs Expand Investment in Stablecoin Firm Ethena

TL;DR Breakdown

Changpeng Zhao’s YZi Labs deepens its stake in Ethena, the protocol behind USDe.
YZi Labs believes the support will enhance USDe adoption and expansion on the BNB chain.
YZi Labs has been an early investor in Ethena.

YZi Labs announced that the firm has increased its investment in Ethena to promote USDe’s adoption across both centralized and decentralized platforms, as well as the development of other products such as USDtb and Converge.

YZi Labs (formerly Binance Labs) is a firm believer in the long-term success of USDe and Ethena, as the firm first invested in the firm through its Incubation Program in early 2024, when USDe was in development. Currently, USDe is the third-largest and fastest-growing USD-backed stablecoin.

YZi Labs’ investment aims to support USDe’s recent expansion on the BNB Chain with new money markets, integrations, as well as ecosystem partnerships. On the product side, it will enable Ethena to expand USDe onto both centralized and decentralized exchanges as well as promote stablecoin utility.

USDe is a synthetic stablecoin that is not directly backed by the US Dollar but instead is backed by cryptocurrencies and uses what it calls a delta-neutral hedging to remain relatively stable in most market conditions. USDe boasts $13 billion+ in supply and Total Value Locked (TVL) and the stablecoin is still showing remarkable growth as it records a 30% growth in its TVL in August.

Ethena’s expansion Beyond USDe

The investment aims to expand the stablecoin on the BNB network while enabling Ethena to further the production of USDtb, a fiat-based stablecoin that is backed by short-term treasury assets, partly by BlackRock’s BUIDL, and Converge; an Ethereum Virtual Machine (EVM) compatible institutional settlement layer enabling the tokenization of real-world assets (RWA).

USDtb is a stablecoin that is pursuing GENIUS compliance, while Converge is developed with Secuitize and BlackRock’s tokenization partners, aiming to bring RWAs to blockchain via USDe and USDtb integration. Converge will increase financial efficiency for institutions by providing a standardized blockchain-based system.

Earlier this year, Ethena raised $100 million in a funding round with notable titles like Franklin Templeton, Dragonfly Capital and F-Prime Capital investing in the firm.