Blockworks Advisory supports the proposal to include USDtb as a backing asset for USDe and as an eligible asset for the Reserve Fund.
From a risk perspective, USDtb appears to be a solid addition. While this proposal comes ahead of USDtb’s launch next week, leaving no track record for analysis, it is a stablecoin created by Ethena Labs and backed predominantly by BlackRock’s BUIDL. The Risk Committee has previously approved BUIDL as an eligible asset for the Reserve Fund due to its minimal risk profile. As a leading real-world asset, BUIDL has a strong brand reputation, a proven track record, and a current market cap of $550M. Approximately 90% of USDtb’s backing will consist of BUIDL, with the remainder held in stablecoins to facilitate redemptions. The non-stablecoin underlying assets are expected to be tokenized U.S. Treasury securities issued by regulated, institutional entities. As this proposal is contingent on the vast majority of USDtb’s backing assets remaining in BUIDL, we recommend a public announcement in the event of any changes to USDtb’s underlying assets. Additionally, even for assets with minimal risk, concentration poses its own risks. We recommend that the Reserve Fund avoid taking an overly concentrated position in BUIDL or BUIDL-backed assets.
To provide additional context on the risk rationale, stable assets currently lack defined standards for inclusion as backing assets. For non-stable assets, we’ve established key parameters such as liquidity, open interest, funding rates, LST suitability, and exit/rebalancing strategies. The goal of adding stable assets like USDtb is to provide risk mitigation, an alternative revenue source, and a liquid buffer to support quick redemptions. Currently, 11% of USDe’s backing comprises liquid stables such as USDC. As USDtb is mintable and redeemable on-demand 24/7 for USDC and BUIDL, it aligns well with this purpose. Its peg mechanism is economically sound and enables whitelisted participants to actively compete in minting and redeeming USDtb, ensuring price stability across CeFi and DeFi markets when external prices diverge from mint/redeem values.
Regarding technological risks, the associated smart contracts have undergone three full audits by Pashov, Quantstamp, and Cyfrin, with no high- or medium-level findings. Additionally, Securitize, the primary tokenization provider, is a leading name in RWA issuance with over $1 billion in on-chain issuances.
This response does not address legal considerations, which are entrusted to other members of the Risk Committee and Ethena Labs.