YZi Labs Expands Investment in Ethena, Boosting USDe Adoption
Tech-focused venture capital firm YZi Labs has augmented its stake in Ethena, the stablecoin issuer behind USDe, which aims to bolster the digital dollar’s adoption on both decentralized and centralized platforms.
Investment Impact on USDe Expansion
This investment will aid Ethena’s USDe (USDe) growth on BNB Chain while allowing Ethena to further develop its USDtb stablecoin along with an institutional settlement layer known as Converge, according to a statement from Changpeng Zhao’s YZi Labs released on Friday.
USDtb is supported by short-duration treasury assets, including BlackRock’s BUIDL, and Converge is an Ethereum Virtual Machine-compatible chain that focuses on the tokenization of real-world assets.
This strategic move aligns with YZi’s mission to “support open, scalable digital dollar infrastructures that can act as an essential backbone for efficiency and liquidity across the entire financial ecosystem.”
Guy Young, CEO of Ethena Labs, commented: “The holy grail of digital dollar distribution has always been embedding stable, yield-bearing assets directly into the core of the crypto economy.”
The push for stablecoin adoption follows an estimate by the US Treasury in April that projected the current $295 billion market would surge to $2 trillion by 2028. This momentum received a boost in July with the signing of the GENIUS Act by US President Trump, considered one of the most comprehensive laws regarding stablecoin regulation so far.
YZi, which was formerly known as Binance Labs, first supported Ethena through its Season 6 Incubation Program back in February 2024, prior to the public launch of USDe. The synthetic dollar of USDe is primarily secured by cryptocurrencies and is maintained through a delta-neutral hedging strategy that ensures its value remains close to $1.
The expansion of USDe on BNB Chain will build on its deployment from April, with new money markets, protocol integrations, and ecosystem partnerships already in progress, YZi noted.
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Since its inception, USDe has surged to a $14 billion market cap, following only Tether (USDT) and Circle’s USDC (USDC) at $171.5 billion and $73.9 billion, respectively, according to data from CoinGecko. Increased acceptance of USDe could enable it to chip away at USDT and USDC’s market share, expanding its use throughout the crypto ecosystem.
Recently, YZi—managing $10 billion in assets across sectors such as crypto, AI, and healthcare—has also advanced Hyperliquid competitor Aster, a decentralized perpetual exchange platform that is set to incorporate USDe into its ecosystem.
Additionally, Ethena has garnered investment backing from major trillion-dollar asset management firms such as Fidelity and Franklin Templeton, while the crypto venture capital firm DragonFly has also expressed its support for the stablecoin issuer.
