YZi Labs Boosts Investment in Ethena, a Leading Stablecoin Issuer

Tech-centered venture capital firm YZi Labs has increased its investment in Ethena, the issuer of the stablecoin USDe, which aims to facilitate the broader adoption of the digital dollar across both centralized and decentralized finance platforms. This additional funding will support Ethena’s efforts to expand USDe’s presence on BNB Chain and develop its USDtb stablecoin, along with the rollout of an innovative institutional settlement layer called “Converge,” according to a statement released on Friday.

USDtb is backed by short-term treasury assets, including holdings from BlackRock’s BUIDL, while Converge is designed as an Ethereum Virtual Machine-compatible chain focused on tokenizing real-world assets. In supporting Ethena’s growth, YZi Labs underscores its mission to develop open, scalable digital dollar infrastructure that enhances liquidity and efficiency across the entire financial ecosystem.

Ethena Labs CEO Guy Young emphasized the significance of this development, stating, “The ultimate goal for digital dollar distribution is embedding stable, yield-generating assets directly into the core of the crypto economy.” He added, “As USDe scales across exchanges, DeFi protocols, and global user bases, this vision is quickly becoming reality.”

The rise of stablecoins comes amid growing expectations that the US market for these digital assets could expand significantly, with the US Treasury estimating it could reach $2 trillion by 2028. Momentum increased in July after US President Donald Trump signed the GENIUS Act, which is considered one of the most comprehensive efforts to regulate stablecoins to date.

Expanding Use Cases for USDe on BNB Chain

Earlier this year, YZi Labs — formerly Binance Labs — invested in Ethena through its Season 6 Incubation Program in February, prior to USDe’s public launch. USDe is a synthetic dollar backed mainly by cryptocurrencies, maintained at a stable value through a delta-neutral hedging strategy that keeps it pegged to $1.

Now, USDe’s expansion on BNB Chain involves launching new money markets, protocol integrations, and ecosystem partnerships. The platform aims to enhance its utility within the fast-growing DeFi space, supporting broader adoption of stablecoins in crypto trading and institutional settlement layers.

Since its debut, USDe has achieved a market capitalization of approximately $14 billion, ranking just behind industry giants Tether (USDT) and Circle’s USDC, which hold market caps of $171.5 billion and $73.9 billion, respectively. As adoption of USDe increases, it has the potential to challenge the dominance of USDT and USDC, further integrating stablecoins into the mainstream crypto ecosystem.

Potential Integration with Hyperliquid Competitors

Meanwhile, YZi Labs, which manages around $10 billion across assets in crypto, AI, and healthcare sectors, recently endorsed Aster, a decentralized perpetuals exchange platform that plans to incorporate USDe into its ecosystem.

Ethena has also attracted backing from prominent asset managers like Fidelity and Franklin Templeton, along with support from crypto VC firm DragonFly, highlighting its growing influence within the stablecoin landscape and the ongoing evolution of crypto markets.