Athena Labs Launches New UStb Stablecoin Backed by BlackRock’s BUIDL Token

• Athena Labs announced the launch of UStb stablecoin, guaranteed by BlackRock and Securitize BUIDL.
• UStb is a separate product from USDe and will function similarly to a traditional stablecoin.
• Athena can use UStb to address USDe’s negative funding rate issues.

Athena Labs announced on Thursday that it has launched a new stablecoin product, UStb. The new stablecoin will be fully backed by BlackRock’s USD Institutional Digital Liquidity Fund (BUIDL) and will function similarly to a traditional stablecoin.

Athena’s UStb stablecoin is available

USDe stablecoin issuer Athena Labs said in an X post on Thursday that it has launched a new stablecoin product, UStb, backed by asset management firm BlackRock and Securitize’s tokenized fund BUIDL.

UStb will work similarly to traditional stablecoins and is completely separate from Athena’s USDe. The team also aims to expand UStb to other centralized exchanges to offer partners a distinct range of collateral.

“It will exist as an isolated product separate from USDe, offering users and exchange partners a new product with a differentiated risk profile for USDe,” Athena Labs wrote in the post.

The launch of UStb may have been prompted by the concerns of Athena community members about the stability of USDe in negative funding rate environments.

USDe maintains its price peg to the US dollar through a delta-neutral strategy that involves Athena Labs buying Bitcoin/Ethereum on the spot market while opening an equivalent short position on the derivatives market. The process allows Athena to earn returns from positive funding rates and ETH staking profits.

Funding rates are periodic payments between perpetual traders to maintain the price of a contract with its spot counterpart.

A negative funding rate occurs when the price of a contract falls below the spot price, indicating that the holders of short positions must pay the holders of long positions.

Athena claims that USDe has not experienced a full week of negative funding despite bear market conditions over the past six months.

Additionally, Athena Labs mentioned that based on a community decision, it may be forced to close its USDe hedging positions.

In this case, it will convert all reserve assets of USDe into UStb to reduce the potential risks that negative funding environments can attract.

Athena’s frontend was recently compromised after a hacker breached the site’s defenses. However, the protocol remained unaffected and user funds remained intact.