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Former Binance Labs YZi Increases Ethena Stake as USDe TVL Hits $13B — What Do They Know?

Former Binance Labs YZi Increases Ethena Stake as USDe TVL Hits $13B — What Do They Know?

YZi Labs, previously recognized as Binance Labs, has deepened its stake in Ethena Labs as USDe hits $13 billion TVL.

The $10 billion funding arm is backing the protocol behind the third-largest USD-denominated crypto asset amid mounting regulatory scrutiny and speedy institutional adoption of the artificial, yield-bearing digital {dollars}.

USDe achieved the quickest progress trajectory to cross the $10 billion milestone in crypto historical past, surpassing established gamers like Tether’s USDT and Circle’s USDC when it comes to adoption.

YZi Lab’s renewed dedication goals to fund USDe integration throughout centralized exchanges, DeFi platforms, and BNB Chain enlargement, as properly as the event of recent merchandise, such as USDtb, a GENIUS Act-compliant stablecoin, and Converge, an institutional settlement layer.

YZi’s Doubles Down on Ethena’s Synthetic Dollar Vision

YZi initially backed Ethena by its Season 6 Incubation Program in February 2024, earlier than the general public launch, when the protocol was proving its crypto-native artificial greenback idea.

Nicola Wang, Investment Director of YZi Labs, famous that the corporate was drawn to Ethena’s distinctive stablecoin design that generates yield by crypto-native mechanisms relatively than conventional banking relationships.

Since YZi’s preliminary funding, Ethena has established extra presence on the BNB Chain following the April deployment, with new cash markets, protocol integrations, and ecosystem partnerships underway.

The renewed backing will advance the event of USDtb, a fiat-backed stablecoin pursuing GENIUS Act compliance, and Converge, an institutional settlement layer developed in collaboration with Securitize and BlackRock’s tokenization companions.

“Since our funding staff first met Guy in late 2023 and backed Ethena in early 2024, Ethena has turn into the class definer for yield-bearing artificial {dollars},” added Dana Hou, Investment Partner at YZi Labs.

Current DeFiLlama data exhibits Ethena’s protocol holding greater than $13 billion in whole worth locked, whereas ENA tokens commerce round $0.67 with a market capitalization of almost $4.59 billion.

Former Binance Labs YZi Increases Ethena Stake as USDe TVL Hits $13B — What Do They Know?
Ethena’s TVL in DeFi (Source: DefiLlama)

Regulatory Headwinds Test Synthetic Stablecoin Resilience

Ethena’s speedy progress has additionally confronted important obstacles, notably in European markets the place regulatory strain mounted over its artificial greenback construction.

Earlier this 12 months, German monetary regulator BaFin pressured Ethena to implement a 42-day redemption plan following a regulatory standoff over violations of the EU’s Markets in Crypto-Assets Regulation.

The dispute centered on BaFin’s concerns about sUSDe, the yield-bearing model of USDe, which regulators flagged as probably constituting an unregistered safety underneath German legislation.

Following sustained strain, Ethena withdrew from German operations on August 6 and deserted its MiCAR authorization software, transferring German customers to its British Virgin Islands-based entity.

This European regulatory friction contrasts sharply with latest momentum in different markets, together with a July $360 million funding round that drove ENA tokens up 21% to six-month highs.

The protocol’s resilience in the course of the German episode, sustaining full backing by offshore entities, could have strengthened YZi’s confidence in Ethena’s operational adaptability.

Synthetic Stablecoins Challenge Traditional Dollar Frameworks

YZi’s expanded help is a part of a broader institutional capital circulate towards artificial, yield-bearing stablecoins as conventional fiat-backed options face limitations in producing sustainable returns for holders.

Ethena’s delta-neutral hedging method permits it to seize yield from crypto markets whereas sustaining greenback stability, differentiating it from bank-backed stablecoins that depend on conventional monetary infrastructure.

This mannequin has attracted backing from main buyers, together with Dragonfly, Fidelity, Franklin Templeton, and a number of other outstanding crypto exchanges, whereas producing cumulative income exceeding $500 million by August.

The positioning builds on stablecoin market momentum, with Treasury Department projections suggesting the sector could exceed $2 trillion by 2028.

Notably, the latest passage of the Trump-backed GENIUS Act goals to additional solidify the greenback’s dominance by supporting dollar-pegged stablecoins in world markets.

The publish Former Binance Labs YZi Increases Ethena Stake as USDe TVL Hits $13B — What Do They Know? appeared first on Cryptonews.

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