Stablecoins have become an essential component of the digital asset ecosystem, offering the stability of fiat currencies with the efficiency of blockchain technology. As demand for faster, transparent, and reliable digital dollars increases, stablecoins are crucial in enabling borderless payments, decentralized finance (DeFi) participation, and on-chain asset settlement. Security, scalability, and institutional-grade backing have emerged as key differentiators in this rapidly growing market. Among the newest and most promising entrants is USDtb, a fully-backed, blockchain-native USD stablecoin that combines speed, transparency, and resilience, making it a significant contender in the evolving stablecoin context.

Introduction to Ethena Labs

Ethena Labs is a decentralized finance (DeFi) protocol built on Ethereum, best known for developing USDe, a synthetic dollar backed by delta-neutral strategies that combine crypto spot holdings with short derivatives positions. This approach enables on-chain dollar stability without requiring traditional banking infrastructure. Founded by Guy Young in July 2023, Ethena Labs emerged from his extensive background in traditional finance, including senior roles at Cerberus Capital Management.

Ethena launched USDe to the public in February 2024, quickly gaining traction through its Shard Campaign, which incentivized early users and integrations. By March 13, 2024, USDe reached 1 billion in supply, and its ENA governance token launched shortly after, expanding the protocol’s decentralized decision-making. The Sats Campaign followed, targeting broader adoption with BTC onboarding as collateral.

Beyond USDe, Ethena also introduced the “Internet Bond,” combining staking rewards and futures yields to offer decentralized, yield-bearing assets. In December 2024, Ethena further expanded its product suite with the launch of USDtb, a fully-backed stablecoin pegged 1:1 to the U.S. dollar supported by BlackRock’s tokenized treasury fund (BUIDL).

With a dual offering of synthetic (USDe) and fully-backed (USDtb) stablecoins, Ethena Labs is positioning itself as a leading innovator in the stablecoin ecosystem, bridging traditional finance and DeFi through robust engineering and institutional-grade asset integration.

USDtb represents a strategic evolution in Ethena’s roadmap, complementing USDe by offering a fully-backed alternative for users prioritizing low-risk stability. This dual model reflects Ethena’s broader vision to serve diverse risk appetites across DeFi and institutional markets.

What is USDtb?

USDtb is a blockchain-based USD stablecoin developed by Ethena Labs and launched in December 2024. It follows a fully backed model, where each USDtb token represents one U.S. dollar and is backed by real-world, dollar-equivalent assets. Unlike many digital tokens, USDtb is designed for stability, transparency, and scalability, offering users the ability to send, receive, hold, or trade it just like any other digital dollar—with the added benefit of faster, cheaper, and permissionless blockchain settlement.

The majority of USDtb’s reserves, approximately 90%, are held in BlackRock’s USD Institutional Digital Liquidity Fund (BUIDL), a tokenized money market fund built in collaboration with Securitize. BUIDL invests in cash, U.S. Treasury securities, and repurchase agreements, providing institutional-grade collateral and lending credibility to USDtb through BlackRock’s reputation. The remaining reserves, around 2%, are held in high-quality stablecoins like USDC, ensuring immediate redemption liquidity during weekends or off-market hours.

Source: usdtb.money

USDtb is cross-chain compatible and designed to scale across major blockchains, including Ethereum, Arbitrum, Avalanche, and Polygon. This interoperability, combined with its strong backing, positions USDtb as one of the market’s most robust and scalable stablecoins. To ensure security and trust, its smart contracts underwent three private audits—by Pashov Audit Group, Quantstamp, and Cyfrin—reporting no high or medium-level risks. A follow-up Code4rena audit contest in November 2024 further validated its code integrity.

Unlike algorithmic or partially collateralized stablecoins, USDtb operates with complete transparency and traditional financial backing. It offers a compelling bridge between decentralized infrastructure and institutional finance, aiming to provide a reliable store of value, an efficient means of payment, and a powerful on-chain asset for DeFi applications.

Looking ahead, Ethena aims to integrate RWA lending agreements into USDtb by Q3 2025, expanding utility. In the long term, USDtb’s vision includes powering a compliant, cross-chain payment network that bridges DeFi ecosystems with global financial infrastructure for seamless value transfer.

How Does USDtb Work? Structural Design and Minting

USDtb is built on a robust and independent structural framework that is intentionally designed to be bankruptcy remote and operationally insulated from the broader business activities of its affiliated partners. The token is issued by Pallas (BVI) Ltd., a business company registered in the British Virgin Islands. Pallas operates under the oversight of the Pallas Foundation, a Cayman Islands exempted foundation that has no shareholders, beneficiaries, or members. Instead, the foundation exists solely to support USDtb—this includes overseeing its issuance, redemption, infrastructure, and long-term growth. The Pallas Foundation is governed by a single, independent director, Marc Piano of Horizons Global, ensuring that its operations remain neutral and transparent.

The assets backing USDtb are managed separately by Pallas Fund (BVI) Ltd., which is also incorporated in the BVI and recognized as a private investment fund by the BVI Financial Services Commission. Pallas Fund holds tokenized U.S. Treasury fund products in institutional-grade custodial accounts. It does not operate with any commercial interest in Ethena Labs. Instead, it is governed by independent directors from Horizons Global and Harneys Fiduciary Services, with no overlap between Pallas Foundation, Pallas Fund, and the appointed investment manager.

Asset management for Pallas Fund is handled by Athene Management Limited, a regulated affiliate of Ethena Labs. Athene is contracted solely under an investment services agreement and holds no equity or voting rights in Pallas Fund, ensuring strict separation of roles. To meet liquidity needs, especially for 24/7 minting and redemption, a portion of the USDtb reserves may be held in stablecoins by Pallas. These are stored in institutional custodial solutions to allow for immediate redemption without reliance on traditional banking hours.

Only individuals and entities from permitted jurisdictions and who pass Know-Your-Customer (KYC) and Anti-Money Laundering (AML) procedures may apply to become Mint Users, gaining the right to mint and redeem USDtb directly with Pallas. Eligible participants are subject to the USDtb Terms and the USDtb Mint User Agreement, which lay out clear guidelines for token usage, redemption procedures, and user responsibilities.

To maintain transparency, USDtb provides clear documentation of its legal and operational structure, monthly NAV reports for Pallas Fund, and on-chain visibility into its wallets and token flows. Importantly, USDtb holders have no governance, income, or participation rights in the issuing or managing entities. The design ensures that USDtb is a transparent, fully-backed stablecoin, supported by a layered governance model, regulated asset management, and a secure custodial structure, offering a high degree of trust for users engaging in digital dollar transactions.

Source: usdtb.money

Minting

USDtb’s minting process is designed with rigorous technical and institutional safeguards, ensuring a secure, transparent, and scalable issuance mechanism. At its core, USDtb utilizes a smart contract-based mint and redeem system deployed on Ethereum, which governs how USDtb tokens are created or destroyed. This smart contract functions based on cryptographically signed orders, authorized and processed by a single admin entity—Pallas. The architecture includes features like per-block mint/redeem limits, delegated signers, and custodian controls, all of which protect the system against abuse and maintain operational integrity.

To initiate a mint or redeem transaction, an approved participant—known as a Benefactor—must first pass KYC/AML checks and register under the USDtb Mint User Agreement. Orders are generated off-chain using EIP-712 or EIP-1271 signature standards and routed through an RFQ (Request for Quote) server operated by Pallas. The RFQ server performs strict validation and last-look filtering to eliminate malicious instructions before approving and signing the transaction for on-chain settlement.

Once verified, the smart contract enforces mint/redeem caps per asset and a global limit per block, ensuring USDtb issuance remains controlled and resistant to large-scale manipulation. For even greater flexibility, USDtb allows delegated signing, where a whitelisted contract address may authorize an external account to execute signing actions.

Minted USDtb can only be sent to pre-approved custodian addresses, which currently include Copper, Fireblocks, Zodia, Komainu, and Coinbase Web3 Wallet (see custodian support table for specific availability of promotional programs). These custodians provide institutional-grade storage, enabling mint users to receive USDtb in a secure and regulated environment.

Source: docs.usdtb.money

The smart contract also supports Beneficiaries, allowing a registered Benefactor to assign an alternate address to receive the minted tokens. All relevant wallet addresses and contract identifiers—such as the mint/redeem contract and USDtb token addresses on Ethereum, Base, Arbitrum, and Solana—are publicly available to ensure full transparency.

Users approved for minting enjoy 24/7 access to USDtb, with minimal delay, even during holidays or weekends. However, if stablecoin reserves are insufficient for immediate redemptions, Pallas Fund may redeem BUIDL tokens to cover withdrawals, or alternatively, users may opt to receive BUIDL directly if eligible.

This design ensures efficient and secure issuance of USDtb, while maintaining the flexibility and trustworthiness required by both retail and institutional users. Combined with monthly NAV reports and transparent on-chain wallets, USDtb’s minting system reflects a high standard of operational integrity in the stablecoin ecosystem.

USDtb Main Features

Institutional Security and Proven Expertise

USDtb offers institutional-grade stability by backing over 80% of its reserves with BlackRock’s BUIDL fund, a tokenized money market vehicle representing U.S. Treasury assets. This backing ensures deep liquidity and trust, bolstered by BlackRock’s extensive asset management experience. The stablecoin’s bankruptcy-remote legal structure further enhances security, ensuring that assets are ring-fenced from other business activities. USDtb’s smart contracts have undergone three comprehensive audits by Pashov Audit Group, Quantstamp, and Cyfrin, all of which returned with no high or medium-risk findings. Additionally, Ethena Labs, creator of USDtb, brings operational credibility from scaling USDe to over $6 billion in market cap. Securitize, a leader in real-world asset tokenization, adds further robustness by enabling reliable on-chain integration of institutional assets.

Cross-Ecosystem Accessibility

USDtb is designed to serve both institutions and individuals. For traditional finance entities, it offers a low-friction entry point into the digital asset space without exposure to volatile cryptocurrencies. Meanwhile, retail users can easily use USDtb across DeFi protocols, centralized exchanges, collateral platforms, and prime brokerage venues. Its architecture ensures compatibility with major blockchains, making it an ideal choice for users seeking a reliable, transferable, and interoperable stablecoin. USDtb’s structure expands access across financial ecosystems, enabling broader integration between Web2 institutions and Web3 markets.

Scalability and Regulatory Consciousness

USDtb is purpose-built for scalability and regulatory readiness, two key differentiators in today’s stablecoin environment. By leveraging a robust KYC/AML framework, USDtb aligns with the growing demands of institutional compliance. Its token bridge and multi-chain presence allow seamless expansion across ecosystems like Ethereum, Base, Arbitrum, and Solana. As regulatory clarity increases globally, USDtb’s transparent structure and clear separation of roles across Pallas, Pallas Fund, and custodians position it as a compliant and forward-looking stablecoin. This ensures its relevance in retail DeFi applications and regulated financial infrastructure, making it a versatile tool for the evolving digital economy.

USDtb Tokenomics

USDtb maintains a fully transparent and overcollateralized reserve structure, with a collateralization ratio of 100.03% as of March 23, 2025. This ensures that every USDtb token is backed 1:1 (or slightly more) by high-quality, verifiable assets held across institutional custodians. The total supply currently stands at 1.18 billion USDtb, with an equal 1.18 billion in backing assets, all of which are auditable and viewable on-chain in real-time.

USDtb’s reserve composition is led by BlackRock’s BUIDL fund, which accounts for approximately 70% of total reserves, valued at around $832.74 million. The remaining 30%, or about $349.94 million, is held in USDC, offering immediate liquidity and redemption availability even during weekends or banking holidays. There is no current exposure to USDT or other assets, highlighting USDtb’s commitment to using transparent, regulated collateral.

From a custodian perspective, USDtb is distributed across major institutional-grade platforms. According to the latest custodian breakdown, 44% of assets are held with Komainu, 27% with Copper, and 30% are managed within the Mint & Redeem contract system. Coinbase and Zodia currently hold no reserves in this snapshot.

The redemption capacity for USDtb is instantaneous, thanks to the balance between tokenized treasuries (BUIDL) and liquid stablecoins (USDC), allowing mint users to redeem large amounts quickly and without friction.

Source: usdtb.money

USDtb Ecosystem

USDtb is supported by a robust ecosystem of institutional investors, custodians, liquidity providers, infrastructure partners, and auditors, reflecting its position as a leading stablecoin for both retail and institutional users. This expansive network enhances USDtb’s reliability, accessibility, and trustworthiness across decentralized and traditional finance sectors.

On the investment side, USDtb is backed by renowned global financial firms. Fidelity, one of the world’s largest asset managers with over $5 trillion under management, and Franklin Templeton, a legacy investment firm with a global footprint, bring traditional finance credibility to the project. Leading crypto-native firms such as Dragonfly and Deribit, as well as major exchanges, have also invested in the growth of USDtb and its infrastructure.

USDtb’s security and user protection are reinforced through top-tier custodians. These include Copper, known for its off-exchange settlement solutions; Coinbase Custody, a secure platform for institutional asset storage; Zodia and Komainu, both regulated digital asset custodians built for institutional-grade protection; and Fireblocks, an enterprise-grade platform for managing digital assets securely.

Deep liquidity across markets is ensured by leading liquidity providers such as Wintermute, Cumberland, GSR, Amber Group, and SCB Limited, which contribute to seamless trading and reduced slippage in high-volume transactions.

On the infrastructure side, LayerZero supports omnichain interoperability, enabling USDtb to function across multiple blockchains. The protocol’s smart contracts have undergone comprehensive audits by Quantstamp, Cyfrin, Pashov Audit Group, and Code4rena, ensuring strong security guarantees for users and developers.

USDtb is also integrated with Stargate Finance, a native asset bridge that facilitates cross-chain liquidity and composable DeFi interactions, further enhancing its role as a foundational stablecoin in the broader Web3 economy.

Source: usdtb.money

USDtb Use Cases

USDtb offers a versatile set of use cases that extend across decentralized finance (DeFi), traditional financial integration, and internal risk management within the Ethena ecosystem. Its full backing by tokenized U.S. Treasury assets and integration with institutional custodians and liquidity providers make it a trusted tool for a variety of financial activities.

• Risk Diversification and Internal Stability: USDtb acts as a hedging mechanism within Ethena’s ecosystem, particularly during adverse market conditions. When USDe’s delta-neutral yield strategy becomes unprofitable, Ethena can close its derivative positions and reallocate capital into USDtb to maintain protocol solvency and user trust. This risk-diversified structure allows the ecosystem to continue operating smoothly, offering users a stable asset option without leaving the platform.
• On-Chain Settlement and Payments: As a blockchain-native dollar, USDtb is ideal for instant, low-cost settlement in DeFi protocols, centralized exchanges, and payment networks. Its stability and transparent reserves make it well-suited for use in peer-to-peer payments, remittances, and merchant transactions where volatility cannot be tolerated. USDtb’s compatibility across multiple chains and wallets expands its usability as a medium of exchange in both retail and institutional environments.
• Bridge to Traditional Finance (TradFi): By backing the stablecoin with BlackRock’s BUIDL fund, USDtb provides a compelling on-chain representation of traditional treasury exposure. This offers institutional investors a pathway into crypto with familiar risk characteristics, facilitating integration between TradFi and digital asset markets. As regulatory clarity improves, USDtb is positioned to become a preferred settlement and collateral asset for compliant financial services.

Is USDtb a Good Investment?

USDtb offers strong robustness through its institutional-grade backing, with over 80% of reserves held in BlackRock’s BUIDL fund, providing exposure to tokenized U.S. Treasuries. While USDtb is designed to maintain a stable $1 value, and therefore isn’t typically considered a speculative investment, it can serve as a reliable store of value, particularly for individuals in economies facing hyperinflation. However, its minting and redemption access is limited to KYC-approved users in specific jurisdictions, and holders have no claim to yield or governance rights, which may limit broader appeal or functionality.

In addition to limited redemption rights and jurisdictional restrictions, USDtb holders face potential risks such as BUIDL fund asset illiquidity and cross-chain bridge vulnerabilities. These can be mitigated through regular audits, enhanced security protocols, and diversified reserve management strategies.

News on USDtb

As reported on 25 February 2025, on the USDtb official website, Zodia Custody has launched a rewards program for institutional clients holding USDe and USDtb. Backed by major financial institutions such as Standard Chartered and NAB, Zodia will distribute on-chain rewards to clients maintaining a $5M monthly average balance per wallet and asset. In partnership with Ethena Labs, this initiative aims to enhance capital efficiency and accelerate institutional adoption of stablecoins. Enrolment opens immediately and will continue on a rolling basis across supported custody platforms.