MegaETH and DeFi protocol Ethena have unveiled USDm, a native stablecoin designed to reduce on-chain transaction costs by redirecting reserve yields to subsidize sequencer fees. USDm will be embedded into apps and services built on MegaETH to support faster, lower-cost payments and microtransactions.
USDm will initially be backed by Ethena’s yield-bearing token USDtb, which is tied to BlackRock’s tokenized money-market fund BUIDL. MegaETH says interest earned on those reserve assets will flow toward sequencer costs — the fees paid to the network component that orders and batches transactions — effectively lowering the per-transaction charge for end users.
The design leaves room to expand USDm’s backing to other Ethena-issued assets such as USDe, Ethena’s $13 billion digital dollar that generates yield by holding spot crypto and shorting derivatives to harvest funding rates. Ethena is positioning itself as a stablecoin-as-a-service provider, enabling other ecosystems to issue native dollar tokens tied into their infrastructure.
This move follows a broader industry trend of wallets and networks issuing proprietary stablecoins rather than relying solely on incumbents like USDC and USDT. Recent examples include MetaMask’s stablecoin plans and Hyperliquid’s search for issuer partners — a sign that ecosystems increasingly want control over liquidity rails and fee structures.
Risk considerations: USDm’s ability to subsidize fees depends on sustained yield from reserve assets and ongoing access to tokenized institutional funds. That creates counterparty, liquidity and regulatory exposure — particularly given evolving U.S. stablecoin rules — and could strain the subsidy model if yields decline.
Source: MegaETH. Read the original coverage for full details.