USDe maintains full collateralization amid first market 'stress test'

    2024.04.16 | exchangesranking | 55onlookers
    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.”

    Mentioned in this article
    Bitcoin Ethereum Ethena USDe
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