CZ's YZi Labs 'deepens' support of Ethena Labs, weeks after Binance adds USDe integrations

YZi Labs, the venture capital firm formerly known as Binance Labs, is increasing its stake in Ethena Labs, the startup behind the popular USDe synthetic dollar. The move comes as Ethena looks to "expand its presence" on BNB Chain, including supporting new money markets, protocol integrations, and ecosystem partnerships.

"We're thrilled to deepen our partnership with YZi Labs, a long-standing and strategic backer," Ethena CEO Guy Young said in a statement. "The holy grail of digital dollar distribution has always been embedding stable, yield-bearing assets directly into the core of the crypto economy."

YZi Labs was one of Ethena’s earliest backers, selecting it as one of 12 early-stage projects to support during the venture firm’s “Incubation Season 6,” before USDe’s official launch.

USDe debuted in early 2024 as a sort of onchain bond that maintained its peg to the dollar using a "delta-neutral" hedging strategy, unlike any other stablecoin at the time. The project quickly gained support from notable investors, including Arthur Hayes' family office Maelstrom and venture firm Dragonfly, as well as major corporations like Brevan Howard and Franklin Templeton.

Ethena's USDe was the fastest onchain greenback alternative to cross the $10 billion milestone, and currently has a market cap and circulating supply of around $14 billion, making it the third-largest “stablecoin,” according to The Block’s data. The asset was first extended to BNB Chain in April.

YZi’s announcement on Friday does not clarify exactly how CZ's family office "has deepened its holding" in Ethena Labs or whether this includes additional financing. It notes "on the product front," YZi’s support will enable the startup to "further drive USDe adoption across both CEXs and DeFi" and advance its USDtb stablecoin, which is fully-backed by BlackRock’s BUIDL fund.

Ethena is co-developing Converge, an EVM-based and institutionally-geared settlement layer developed with Securitize and several BlackRock tokenization partners "to bring TradFi-grade RWAs on-chain."

Earlier this month, Binance, the world’s largest crypto exchange, announced it would integrate USDe as a spot trading pair and yield-bearing collateral asset for derivatives traders.

YZi Labs, now a $10 billion investment firm, was spun out of Binance in January, months after Zhao was released from prison. The former Binance CEO served a four-month sentence in 2024, having pleaded guilty in 2023 to charges related to violating anti-money laundering laws and other compliance failures.