Ethena

Out of an abundance of caution we are temporarily pausing our LayerZero OFT bridges from Ethereum mainnet until the root cause of the rsETH incident has been identified. We expect the pause to last ~6 hours and will provide updates on this temporary pause as we receive them. To reiterate, we can confirm Ethena has no exposure to rsETH, and remains >101.0% overcollatereralised. Proof of reserves are typically provided on a weekly basis but we will be providing a refreshed version in the next few hours given the existing circumstances.

Feels like pooled lending protocols would benefit from a rate limit on the supply of an asset being deposited for collateral Like, if the current supply is 100m and the supply cap is 300m, the supply should only be allowed to go to 110m in the next 10 minutes. Nobody needs to deposit all 200m in one shot This matters because if/when an exotic asset is hacked, the impact of the hack is constrained by the size of the exit paths for that asset. Especially when you consider that many hacks are infinite mint bugs… there the size of the exits literally determines the size of the hack. Lending protocols are often the largest exits (DEX liquidity is usually pretty small). Having a “smart cap” that is a bit above current supply, which can adjust over a few hours to the true cap, would make a huge difference. It would have saved rsETH depositors $200m today This also raises an interesting point: asset issuers should want this too. If you are an asset issuer who issues receipt tokens which have a redemption delay, then you actually aren’t worried about a hacker redeeming with you. But you need possible exits to be as small as possible while not impeding normal users. High supply caps need to be seen as a liability, rather than a sign of stature.

Ethena has no exposure to the rsETH exploit on the Aave v3 instance on mainnet

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USDe reserves are evolving: reducing concentration and building resilience across market cycles with a diversified collateral base. Four additions to the collateral backing are detailed below for consideration by the risk committee, each a natural extension of existing Ethena allocations: → Overcollateralised institutional lending → High quality liquid RWAs beyond TBills → Equity & commodity basis exposure → Prime lending Read more below on proposed updates: