Ethena Labs increases BUIDL holdings to $1.29 billion and strengthens dependence on BlackRock funds

Ethena Labs increases BUIDL holdings to $1.29 billion and strengthens dependence on BlackRock funds

Ethena Labs increases BUIDL token holdings to $1.29 billion

Ethena Labs recently minted $225 million in BUIDL tokens, bringing its total supply to an impressive $1.29 billion. This tokenization was carried out in collaboration with BlackRock, one of the largest asset managers in the world.

BlackRock’s tokenized BUIDL funds

The BUIDL token represents a tokenized version of a money market fund managed by BlackRock, consisting notably of assets such as cash, short-term U.S. Treasury securities and repo agreements. The price performance and growth of the BUIDL token is of central importance to Ethena, as over 90% of the supply of the synthetic stablecoin USDe comes from these tokenized assets. The rest of the USDe inventory is complemented by Tether (USDT) and USD Coin (USDC).

Dependence on BlackRock

On the one hand, this great dependence on the services of the BUIDL token offers Ethena a solid basis, supported by clear and legal framework conditions. On the other hand, such dependency carries risks, especially if the partners' strategic decisions change. An example of such difficulties is shown by Ethena GmbH, a subsidiary of Ethena Labs, which was recently banned from offering the USDe stablecoin in Germany by BaFin, the German financial regulator. This resulted in USDe discontinuing distribution in the region.

Trend of tokenized government bonds

Ethereum’s aggressive approach can be understood in light of the current market conditions. The tokenization of U.S. Treasury securities-based assets is trending and has reached a market capitalization of $5.2 billion. The average return in this sector is 4.34%, which is attractive compared to traditional savings rates. Ethena seeks to exploit this dynamic by creating a connection between traditional financial instruments and the DeFi world. This could be of particular interest to retail investors looking for assets that offer real returns.

New blockchain initiative: Converge

In March, Ethena Labs and Securitize announced the launch of a new blockchain called Converge. This blockchain will be compatible with the Ethereum Virtual Machine and aims to provide retail investors with broader access to DeFi applications and institutional products. Converge could be viewed as a kind of “toll road” connecting DeFi to traditional financial markets – access open to anyone who knows the route.

Cooperation with Emirates NBD Bank

Complementing Ethena's activities, Dubai-based Emirates NBD Bank has also partnered with BlackRock. This partnership aims to provide the bank's wealth management clients with access to alternative asset classes, including private credit and multi-alternatives. This suggests that the traditional financial world is also adopting a DeFi structure, but in a more formal execution.

Overall, Ethena Labs' initiatives and partnerships show how the financial sector is evolving and breaking new ground to make modern financial instruments accessible to a broader public.