Ethena Labs is forging ahead with plans to merge its staked synthetic dollar, sUSDe, with World Liberty Financial, a decentralized finance (DeFi) protocol that has gained the endorsement of President-elect Donald Trump.
The proposal put forward by the DeFi protocol aims to incorporate sUSDe into World Liberty Financial’s upcoming Aave instance. Should the community give its approval, the staked stable token will be designated as a core collateral asset for users.
sUSDe is the staked variant of Ethena Labs’ USDe coin, a synthetic dollar that is backed by leveraged positions supported by cryptocurrencies like Bitcoin (BTC) and staked Ethereum (stETH). This token’s unique mechanics involve both longing and shorting other assets, ultimately maintaining its dollar peg through the net effect. The total value locked data from DefiLlama indicates that users have deposited nearly $6 billion into USDe.
According to Ethena Labs, integrating sUSDe into World Liberty Financial (WLFI) will offer various advantages to users, including the ability to earn sUSDe rewards to enhance native WLFI gains. WLFI, a protocol endorsed by Trump, allows DeFi users to borrow and lend assets on-chain while earning yield for their participation.
Ethena Labs believes that introducing sUSDe to WLFI via Aave’s Core instance will enhance stablecoin liquidity and increase user engagement within the platform.
The proposal to link sUSDe and WLFI hinges on the Aave protocol activating its lending contracts on World Liberty Financial. Aave governance members have already voted in favor of deploying Aave v3 on WLFI through a vote concluded on Dec. 13.
In addition to this collaboration, Ethena Labs has also joined forces with BlackRock and Securitize to launch USDtb, a dollar stablecoin that is primarily backed by tokenized money market BUIDL. This money market invests in U.S. government-issued debt such as Treasury Bills.
USDtb operates similarly to traditional stablecoins like USDC or USDT, utilizing cash and cash-equivalent reserve assets to back each token. BlackRock’s BUIDL represents the majority of the backing for USDtb, making it currently the stablecoin with the highest BUIDL allocation in the market.
Overall, these strategic partnerships and integrations are set to propel Ethena Labs and World Liberty Financial to the forefront of the DeFi space, providing users with innovative solutions and enhanced opportunities for earning yield on their assets.