Ethena Labs, the backers of the largest decentralized synthetic dollar, USDe, is partnering with Jupiter to launch JupUSD, a native Solana-based stablecoin, The Block has learned exclusively.
The token is slated to launch in the fourth quarter. As part of the arrangement, Jupiter plans to "progressively convert" about $750 million of USDC from its Liquidity Provider Pool into JupUSD, a representative said.
JupUSD will join Ethena's expanding selection of dollar-pegged offerings. In July, for instance, the project partnered with federally chartered crypto bank Anchorage Digital to mint its USDtb stablecoin in the U.S., making it the first stablecoin issued under GENIUS Act standards.
"JupUSD marks the latest addition to Ethena's Whitelabel product lineup, which is already powering stablecoin partnerships with industry leaders such as SUI and MegaETH," Guy Young, founder of Ethena, said in a statement.
The move also marks a significant expansion for Ethena on Solana, and could potentially unlock Solana's burgeoning stablecoin market, which is currently dwarfed by Ethereum's circulating stablecoin supply at a ratio of about 9.27%, according to The Block's data. Ethena has previously launched USDe on Solana.
What is JupUSD?
JupUSD will be integrated across the Jupiter ecosystem — particularly in five main areas.
"As part of the integration, JupUSD will be useable as (1) collateral in Jupiter"s decentralized perpetuals exchange; (2) a primary stablecoin for our trading interfaces and Jup Mobile; (3) a major liquidity hub on Jupiter Lend; (4) a liquidity pairing token on Meteora, a key DEX partner of Jupiter; and (5) all of the upcoming new products within the Jupiter ecosystem," the representative said.
Jupiter, initially focused on decentralized exchange aggregation on Solana, has grown to become something of a superapp, including moves in the AI and lending verticals.
"Stablecoins have proven true product market fit onchain, and we believe the sector will 10-100x from here," Jupiter co-founder Siong Ong said. "JupUSD represents a major step forward for Jupiter to enter the game, create more value across the ecosystem, and ensure Jupiter remains at the center of all things DeFi."
At launch, JupUSD will be "100% backed by USDtb," a USD-pegged stablecoin launched in 2024 that primarily invests in BlackRock's tokenized USD Institutional Digital Liquidity Fund (BUIDL). However, there exists"the potential to migrate to USDe backing over time," the rep said.
USDe is a $14.8 billion tokenized asset that uses delta-hedging strategies with staked crypto assets like ETH and short derivatives positions to maintain its peg to the greenback. The asset has overtaken Sky's (formerly MakerDAO) USDS and DAI tokens as the largest decentralized stablecoin by supply, according to The Block’s data.
USDT and USDC, the two largest stablecoins maintained by centralized issuers Tether and Circle, have market caps of $177 billion and $74 billion, respectively.
In September, M2 Capital, the proprietary investment arm of UAE digital asset conglomerate M2 Holdings, joined Ethena Labs’ list of existing backers — including Binance Labs, Bybit, Dragonfly, Fidelity, and Franklin Templeton, among others — through a $20 million strategic investment in Ethena’s ENA governance token.
