BlackRock BUIDL Raises $45 Million to Ethena Labs Reserve Fund

Bittime - On July 16, 2024, Ethena Labs announced the opening of a discussion forum to discuss the allocation of $45.4 million in reserve funds. The fund is currently backed by $235 million in Tether (USDT) backing their USDe stablecoin. Ethena Labs plans to invest some of these funds in real asset products that generate returns.

BlackRock BUIDL Submits Reserve Fund Proposal

In short order, BlackRock, through the distribution of their BUIDL funds by Securitize Markets, submitted a proposal to obtain an allocation from Ethena Labs' reserve funds. The BUIDL fund, a tokenized money market fund, offers daily returns of around 4.88% to its holders. Assets held in BUIDL funds include cash, U.S. Treasury bills, and other liabilities with maturities of three months or less. Additionally, this fund also invests in government money market funds.

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Ethena Labs Tokenomics Changes Draw Criticism

In June 2024, Ethena Labs implemented a 50% lockup requirement for their funds, leading to a backlash from the community and a drop in the price of the ENA token. This change requires airdrop recipients to lock up at least half of their ENA tokens or risk losing their unvested tokens completely.

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Other Applications of Steakhouse Financial and Mountain Protocol

Apart from BlackRock, several other entities also submitted applications. Steakhouse Financial proposes a reserve fund allocation with their USD Coin (USDC) lending vault, which has a variable yield percentage of between 0.91% to 31.19%. These funds consist of USDC loans collateralized by Wrapped Bitcoin (WBTC), Wrapped Staked Ethereum (WSTETH), and treasury bills. Mountain Protocol founder Martin Carrica has also expressed interest in being allocated reserve funds although a formal application has not been submitted.

BlackRock BUIDL Hits Half a Billion Dollars in Four Months

The BlackRock BUIDL application was written by Jonathan Espinosa, director at real asset tokenization firm Securitize. Since launching last March, the BUIDL fund has reached more than half a billion dollars in assets under management in less than four months, with $245 million raised in its first week. With multiple applications coming in, Ethena Labs seeks to increase their capital efficiency and provide more value to USDe and ENA holders, while leveraging the efficiency of blockchain-based reserves.

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