YZi Labs said Friday it has increased its investment and strategic backing for Ethena Labs, the developer of USDe, now the third-largest U.S. dollar-denominated crypto asset.
The decision comes as Ethena’s synthetic stablecoin surpasses $13 billion in supply and more than $13 billion in total value locked (TVL), making it the fastest digital dollar asset to cross the $10 billion mark, according to the companies.
Early Investment and Growth
YZi Labs, formerly Binance Labs, was one of Ethena’s earliest investors, having supported the project during its incubation phase in February 2024. At the time, Ethena was testing its synthetic dollar model, which uses delta-neutral hedging to stabilise value and generate yield without relying on traditional banking infrastructure.
“Since our team first met Ethena in late 2023, the project has grown into a category leader for synthetic dollar assets,” said Dana Hou, an investment partner at YZi Labs.
Ethena’s USDe has since integrated with major centralised exchanges and decentralised finance (DeFi) applications, helping broaden its role as a stablecoin option within the wider digital asset market.
Expanding on BNB Chain and Product Development
The renewed support comes as Ethena increases its footprint on the BNB Chain following an April deployment. The expansion includes new integrations with money markets, protocols, and ecosystem partnerships.
In addition to scaling USDe adoption, Ethena is developing USDtb, a fiat-backed stablecoin that aims to meet regulatory requirements, and Converge, a settlement layer created with Securitise and tokenisation partners connected to BlackRock. Converge is intended to bring regulated real-world assets on-chain, further linking traditional finance with blockchain infrastructure.
Guy Young, founder and CEO of Ethena Labs, said the partnership with YZi Labs will help strengthen the project’s reach across exchanges, DeFi platforms and institutional markets.
Outlook
USDe’s rise places it alongside Tether’s USDT and Circle’s USDC as one of the largest dollar-denominated assets in the cryptocurrency sector. The backing from YZi Labs underscores continued investor interest in stablecoins that aim to provide both liquidity and yield opportunities for digital markets.
YZi Labs said its ongoing commitment is focused on supporting infrastructure for scalable digital dollar assets that can serve broader financial applications.
