Yzi Labs expands its backing of Ethena Labs and its digital dollars

Yzi Labs announced it will expand its backing of Ethena, one of the biggest producers of digital dollars, USDe. Binance’s investment arm was one of the earliest backers of Ethena. 

Yzi Labs, Binance’s investment fund, will expand its backing of Ethena Labs. The renewed backing will come in the form of adding ENA to the fund’s positions. The fund will support Ethena’s next growth phase by boosting USDe adoption across exchanges, both centralized and DEX. 

Ethena’s USDe token to grow on BNB Chain

The USDe token, initially launched on Ethereum, will also spread on BNB Chain. After surviving a bear market and volatility, Ethena Labs will add new stablecoin assets. Unlike algorithm-derived USDe, USDtb will be fiat-backed. The new stablecoin launch follows the trend of new asset creation, compliant with the newly introduced Genius Act for the US markets. 

‘We’re thrilled to deepen our partnership with YZi Labs, a long-standing and strategic backer. The holy grail of digital dollar distribution has always been embedding stable, yield-bearing assets directly into the core of the crypto economy. With USDe now scaling across exchanges, DeFi protocols, and global user bases, that vision is becoming a reality,’ said Guy Young, co-founder of Ethena Labs.

Yzi Labs will also participate in Converge, a new institutional-grade settlement layer. The settlement layer will be built in partnership with BlackRock and Securitize, and is part of the BNB Chain’s drive to offer expanded tokenization.

The additional support for Ethena arrives at a time when Yzi Labs aims to position Binance as the leader for both centralized and Web3 activities. The fund has backed more than 300 projects, with significant returns on its native tokens. 

Ethena locks in peak value

Following the Yzi Labs announcement, ENA tokens traded within their usual range, at around $0.67. ENA has not seen outsized hype during the recent altcoin market. An additional inflow of ENA buying may signal long-term confidence. However, the move also creates significant insider holdings, potentially putting pressure on ENA or seeking exit liquidity. 

However, Ethena now holds peak value locked at over $14.14B. The generally bullish direction of ETH is also one of the best-case scenarios for the protocol, allowing it to expand the supply of USDe. 

Following the recent period of growth, Ethena expanded USDe to over 14B tokens. Of those tokens, a record amount of 6.09B are staked, offering a 20% premium.  

Increased activity on Ethena also boosted daily fee production. Ethena became the most active fee-producing protocol, with over $13.34M in fees for the past 24 hours. Ethena surpassed Circle and displaced Pump.fun from the second spot, with only Tether producing higher fees. 

The protocol achieved a record of $24.32M in fees in December 2024, but in the past few months, Ethena has produced more consistently high daily fees. The protocol has around $31.2M in annualized revenues, with fees just under $900M.

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