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Ethena Labs pledged to publish monthly reports detailing custody and reserve information to improve transparency around its USDe stablecoin.
Synthetic dollar issuer Ethena Labs released three custodian attestations for assets backing its $2.67 billion-strong USDe token hedged by crypto-denominated currencies including Bitcoin (BTC) and Ether (ETH).
According to the defi startup, Ethena’s stablecoin holds $1.31 billion and $1.33 billion of its stablecoin reserves with Swiss firm Copper Markets AG and CH Europe Digital Solution (CEFFU) respectively. Cobo Global HK Limited manages the remainder of USDe’s assets worth $5.52 million. Ethena Labs also boasts a $42.3 reserve fund for emergency purposes.
The triple attestation shared on May 27 claimed USDe boasted a 101.74% backing rate, meaning the asset was over-collateralized and could accommodate redemptions if every user chose to liquidate, per the issuer.
Addressing Ethena USDe concerns
Ethena’s post responds to community feedback after USDe’s mainnet launch in February. Following its debut of governance token ENA, and onboarding BTC as a hedge asset, many in the community grew concerned about a possible systemic failure reminiscent of the 2022 crashes.
One of the prominent voices with doubts was Fantom developer Andre Cronje. As crypto.news reported, Cronje drew parallels between USDe, and TerraUSD (UST), an algorithm stablecoin designed by Do Kwon’s Terraform Labs.
At its peak, UST commanded an $18 billion market cap. But when the token crashed, it triggered a $60 billion implosion across the Terra ecosystem and kickstarted a bankruptcy domino through the crypto landscape.
Despite industry skepticism, USDe has garnered user demand and has a market cap of nearly $3 billion per DefiLlama. Also, the protocol added more cryptocurrencies to its reserves and tied partnerships with liquidity pool providers like Frax Finance.