Risk Committee Member Response from BA Labs
TLDR: We support inclusion of USDtb as an eligible USDe backing asset and reserve fund component.
We have reviewed details of the upcoming USDtb product, including management, structuring, and composition of backing assets. We find that the product is suitable for inclusion as both a backing asset of circulating USDe and within the Ethena protocol reserve fund.
USDtb is backed primarily by tokenized US treasury products (initially this will be at least 90% backed by BUIDL) and is held through an independent BVI structure that is bankruptcy remote with respect to Ethena Labs. In our view, the product can be considered close to risk free, on par with other tokenized treasury products with only marginally more fundamental risk vs BUIDL itself (due to an additional layer of entities and smart contracts on top of BUIDL). We also note that ~10% of reserves for USDtb are expected to be held in stablecoins such as USDC, which can help provide additional liquidity over weekends or other times when tbill primary markets are unavailable.
The product will be managed by an affiliate of Ethena Labs acting as a service provider to the token issuer. In our view this does not introduce any additional trust assumptions from the perspective of the Ethena protocol or USDe holders given that Ethena Labs is already closely involved with managing delta neutral positions backing USDe.