YZi Labs, the investment firm established by Binance co-founder Changpeng "CZ" Zhao and Yi He, has significantly increased its stake in Ethena Labs, the developer behind the USDe stablecoin. USDe has rapidly grown to become the third-largest dollar-pegged cryptocurrency with a circulating supply exceeding $13 billion.
This strategic investment coincides with Ethena Labs' expansion phase, which includes launching on BNB Chain and developing innovative products that connect cryptocurrency with traditional finance. The protocol is working on USDtb, a fiat-backed stablecoin, and Converge, an institutional settlement layer being developed in collaboration with Securitize and BlackRock-connected partners.
USDe, described as a "synthetic dollar," maintains its $1 peg through a unique mechanism that combines bitcoin (BTC), ether (ETH), and Solana's SOL (SOL) as backing assets, paired with equivalent short perpetual futures positions on exchanges.
Having launched less than two years ago, USDe achieved the $10 billion supply milestone faster than any other dollar-pegged crypto asset in history.
"Since our initial meeting with Guy Young in late 2023, Ethena has established itself as the category leader for yield-generating synthetic dollars," stated Dana Hou, investment partner at YZi Labs.
These developments provide users with enhanced options for holding and utilizing digital dollars across both centralized exchanges and decentralized finance protocols. For institutional investors, products like Converge offer familiar settlement mechanisms for tokenized assets, potentially accelerating adoption of blockchain-based financial infrastructure.