USDe maintains full collateralization amid first market ‘stress test’ USDe maintains full collateralization amid first market ‘stress test’
Ethena has committed to a monthly attestation report as part of its transparency drive.
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Updated: Apr. 15, 2024 at 8:09 pm UTC
Cover art/illustration via CryptoSlate. Image includes combined content which may include AI-generated content.
Ethena Labs, the entity behind the USDe synthetic dollar, has released the asset’s first attestation report, which shows the stablecoin remained fully collateralized over the past week despite significant turbulence in the crypto market.
The report follows a brief depegging incident during a market-wide downturn during the weekend.
Attestation report
As of April 15, the current supply of USDe stands at $2.358 billion. The aggregate value of assets, comprising Bitcoin, Ethereum, liquid-staked Ethereum, and Tether’s USDT stablecoin, securing the issued tokens totals $2.365 billion, reflecting an excess reserve of $32.7 million.
Three distinct custodians hold these assets. Copper manages $1.279 billion, Ceffu oversees $1.066 billion, and Cobo handles $4.871 million. All assets backing USDe are securely stored off-exchange within institutional-grade custodial solutions.
Furthermore, $15.65 million is in the Ethena mint/redeem contract, while $32.7 million is in the reserve fund address.
The protocol said the attestation report represents its efforts towards enhanced transparency and has committed to delivering monthly updates to the public.
Stress test
The release of the attestation report comes after USDe experienced a brief depegging event during the weekend amid heavy market volatility triggered by Iran’s attack on Israel.
On April 13, USDe’s value plummeted to as low as $0.995 before reclaiming the $1 peg as market conditions improved.
Seraphim Czecker, Ethena’s head of growth, lauded USDe’s resilience during this market turbulence, describing it as passing its inaugural stress test.
However, dissenting voices argue otherwise, asserting that the crypto market’s inherent volatility renders the recent price dip as commonplace. Consequently, they suggest the protocol could face heightened risk should the market experience more significant declines.
Eric Forgy, the founder of crypto firm CavalRe, said:
“That wasn’t a stress test. By crypto standards, that was a typical afternoon. Let’s see what happens when ETH has a 40+% daily move.”
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Posted In: Featured, Stablecoins
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Oluwapelumi Adejumo
Oluwapelumi values Bitcoin's potential. He imparts insights on a range of topics like DeFi, hacks, mining and culture, underlining transformative power.
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Bitcoin, a decentralized currency that defies the sway of central banks or administrators, transacts electronically, circumventing intermediaries via a peer-to-peer network.
Ethereum
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Ethereum is a decentralized, open-source blockchain platform that enables the creation of smart contracts and decentralized applications (DApps).
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Ethena is a synthetic dollar protocol built on Ethereum that will provide a crypto-native solution for money not reliant on traditional banking system infrastructure, alongside a globally accessible dollar denominated savings instrument – the ‘Internet Bond’.