MegaETH, a layer-2 scaling solution for Ethereum known for its rapid transaction speeds, positioning it as a near “real-time” blockchain, has announced the upcoming launch of its own native stablecoin, USDm, in collaboration with the prominent decentralized finance (DeFi) protocol Ethena. As of Monday’s announcement, the partnership aims to revolutionize transaction efficiency within the MegaETH ecosystem. You can check the ENA token performance.
According to a company statement, USDm is engineered to be deeply integrated into applications and protocols operating on the MegaETH network. A primary objective is to reduce transaction expenses on the network. Revenues generated from reserve assets will be strategically allocated to offset sequencer costs, thereby benefiting users with lower fees.
Shuyao Kong, co-founder of MegaETH, emphasized the benefits of the new stablecoin. “USDm translates to reduced fees for end-users and expands the possibilities for application design,” Kong stated. “We are excited to collaborate with Ethena to create a mutually beneficial environment for everyone involved in our ecosystem.”
Initially, USDm will be collateralized by Ethena’s USDtb, a yield-bearing token backed by BUIDL, BlackRock’s tokenized money market fund. MegaETH has indicated that future Ethena-issued tokens, potentially including USDe, may be added as backing assets in the future, according to their official statement.
The price of Ethena’s governance token, ENA, saw a 7% increase in value over the last day, surpassing the overall performance of the broader cryptocurrency market.
Stablecoins constitute a substantial portion of the cryptocurrency market, with a combined value of $270 billion. These digital currencies, which primarily maintain a value pegged to the U.S. dollar, are essential for liquidity and trading in the crypto space. They are also increasingly utilized for international payments, offering potentially faster and more cost-effective transactions compared to traditional banking systems. Favorable regulation emerged earlier this year when President Donald Trump signed the GENIUS Act into law, representing a key legislative advancement for the crypto sector in the United States.
MegaETH’s USDm is part of a wider trend where crypto ecosystems are developing their own stablecoins with specialized providers instead of solely depending on established options like Circle’s USDC and Tether’s USDT. This trend indicates a desire for greater control and customization within these ecosystems.
MetaMask, a well-known crypto wallet, recently unveiled its plans for its own stablecoin, collaborating with M0 and Stripe’s Bridge. Hyperliquid, a layer-1 network popular for its on-chain perpetual swaps exchange, is currently evaluating potential partners for issuing its proprietary stablecoin.
MegaETH’s stablecoin initiative also highlights Ethena’s expansion into the stablecoin-as-a-service market, empowering other crypto platforms to create their own stablecoins. Ethena is known for its $13 billion digital dollar, USDe, which generates yield by holding cryptocurrencies like Bitcoin and Ether while simultaneously shorting an equivalent amount of derivatives to capture funding rates.
Further Reading: Hyperliquid Faces Community Pushback Against Stripe-Linked USDH Proposal