Ethena Labs has made a commitment to enhance transparency regarding its USDe stablecoin by promising to release monthly reports containing detailed information about custody and reserve holdings.
The synthetic dollar issuer, Ethena Labs, has recently provided three custodian attestations validating the assets that support its robust USDe token, which amounts to $2.67 billion. These assets are backed by cryptocurrencies such as Bitcoin (BTC) and Ether (ETH).
As per information from the decentralized finance (defi) startup, Ethena’s stablecoin reserves include $1.31 billion held with Swiss firm Copper Markets AG and $1.33 billion with CH Europe Digital Solution (CEFFU). The remaining assets of USDe, valued at $5.52 million, are managed by Cobo Global HK Limited. Additionally, Ethena Labs maintains a reserve fund of $42.3 million specifically earmarked for emergency situations.
On May 27, the triple attestation revealed that USDe had a 101.74% backing rate, indicating that the asset was over-collateralized. This surplus could accommodate redemptions even if every user opted to liquidate their holdings, as stated by the issuer.
Resolving Concerns Regarding Ethena USDe
Ethena’s message addresses the community’s feedback post the launch of USDe on the mainnet in February. With the introduction of the governance token ENA and the inclusion of BTC as a hedge asset, concerns arose within the community regarding potential systemic failures akin to the crashes seen in 2022.
Among those expressing doubts was Fantom developer Andre Cronje. As reported by crypto.news, Cronje drew comparisons between USDe and TerraUSD (UST), an algorithmic stablecoin developed by Do Kwon’s Terraform Labs.
UST reached its peak with an $18 billion market capitalization. However, its subsequent crash led to a $60 billion collapse across the Terra ecosystem, setting off a series of bankruptcies throughout the crypto industry.
Despite initial doubts from the industry, USDe has seen significant user demand and currently boasts a market cap approaching $3 billion according to DefiLlama. Additionally, the protocol has expanded its reserves to include more cryptocurrencies and has formed partnerships with liquidity pool providers such as Frax Finance.
0 Comments