Ethena Labs has just revealed that it integrated Chaos Labs’ data authenticity technology, Edge Proof oracles, to strengthen the risk management framework for its synthetic dollar token USDe. Ethena’s USDe is a synthetic stablecoin that maintains a soft peg with the U.S. dollar via an automated delta-hedging strategy that shorts Bitcoin and Ether perpetual futures to balance changes in the prices of cryptocurrencies. Ethena Labs’ latest move adds credibility to USDe’s reserves Ethena Labs has integrated Chaos Labs’ Edge Proof of Reserves Oracles to enhance the risk management framework for its synthetic dollar token, USDe. This consolidates the trust between the team and the community as Edge Proof oracles will independently verify the total dollar value of USDe’s reserves and the reserve coverage of USDe’s supply. The oracles also confirm that reserves are governance-approved and delta-neutral. Edge oracle proof of reserves. Source: Ethena Labs The Edge Proof of Reserves (PoR) oracles work by constantly monitoring the reserve levels of tokens which it compares to the collateral backing them. All of this happens smoothly by integrating off-chain data from custodians and centralized exchanges into the on-chain environment to ensure scalable and robust support for institutional-grade applications. The integration will also provide automated alerts to inform users of any data anomalies or if reserve levels fall below the required thresholds. All verified data can be accessed on Ethena’s transparency page and attestor interfaces, so stakeholders don’t have to worry about being out of the loop at any point in time. “This integration ensures continuous, independent verification of reserves, fostering greater transparency and security for all users. By leveraging real-time, tamper-resistant data, Ethena reinforces its commitment to a robust and reliable synthetic dollar,” Ethena Labs said in its announcement. Pairing up with Chaos Labs’ Edge oracle will also leverage the oracle provider’s reputation and capabilities. The oracles ensure security and privacy along with real-time and transparent data verification, including for reserves held off-chain or across different blockchains. They have secured over $70 billion in volume, providing risk management to decentralized finance (DeFi) giants like AAVE, Jupiter, GMX, and Tether. Ethena Labs executives praise Bybit’s disaster response Ethena Labs, and many other protocols in the crypto ecosystem collectively breathed a sigh of relief after it became apparent that the Bybit hack — now touted as the largest heist in crypto history — would not bring the exchange down to its knees. A graph showing the largest crypto thefts of all time. Source: Kobeissi Letter The CEO of Ethena Labs has since taken to X, formerly Twitter, to praise Bybit’s CEO for taking the bull by the horns and reacting quickly to mitigate damages. “Don’t think I’ve ever seen a team handle crisis communications as well as they did,” the impressed CEO wrote. “Stood up to face the music immediately to provide transparent answers to the community. An example for us all to look up to.” The CEO’s post also revealed details of how Ethena reacted to the crisis, claiming it handled the largest single day of redemptions and unwound all unrealized exposure to Bybit within an hour of the news breaking. The timely response was great, but Ethena Labs is going even further in its quest to ensure its community can continue to have faith in its ability to carry out its daily activities while keeping them protected. As earlier stated, Bybit was attacked by malicious actors, eventually alleged to be the infamous Lazarus Group, late Friday. The exploit led to the loss of $1.4 billion in various cryptocurrencies, and affected many projects including Ethena Labs which faced a potential crisis as its investors worried about a significant depeg for USDe. On Bybit’s part, the company’s CEO, Ben Zhou, reassured customers that withdrawal channels were still open, though processing times were delayed due to congestion. Zhou would later share a heartfelt post on X, where he expressed gratitude for the solidarity the crypto space has shown Bybit in the aftermath of the hack. Ben Zhou, the co-founder of Bybit. Some protocols stepped in to make it harder for the hackers to get the funds out and other exchanges like Binance and Bitget loaned Bybit some funds to ensure they didn’t have to suspend withdrawals, which would have undoubtedly caused mass panic in the minds of investors who are still healing from the FTX debacle. With the worst behind it, the company is focusing on recovering its stolen funds and rebuilding its coffers. On Saturday, Bybit offered 10% of recovered funds—up to $140 million—to on-chain sleuths who could help the firm recover the stolen assets. Zhou has also shared an SOS to any bridges willing to freeze or recover the funds stolen from his exchange. On February 24, Zhou revealed in an update that his exchange has now fully closed the ETH gap following the hack and will publish a new audited POR report soon. The Bybit hack affected Ethena Labs’ USDe Ethena’s USDe was one of the tokens that saw some volatility over the weekend due to the Bybit hack. The instability caused it to plunge to 0.982 against USDT and 0.988 against USDC, as investors worried that the protocol was disproportionately exposed to Bybit’s ether (ETH) derivatives market. While Bybit executives sprung into action doing damage control, Ethena Labs also got busy assuring its investors that all assets backing USDe were held off-exchange on a custodian named Copper, which allows users to post collateral without depositing the asset on a CEX and that it had a reserve fund that was more than enough to offset any losses from the Bybit exploit. The quick disclosure calmed investors and prevented mass hysteria even though Ethena Labs initially had $30 million in exposure to Bybit through its financial derivatives. Tom Wan, the head of data at Entropy Advisors highlighted Ethena Labs’ resilience in how it honored $123 million in redemptions on February 21, 2025, about 2% of the $6 billion total supply. USDe supply is now down to $5.88 billion. Wan also noted that $248M USDe was unstaked from the staking contract, with the largest redemption coming from the Spark PSM3 contract’s $202M on February 21. The contract alone accounted for 81% of the unstake total. The USDe staking ratio dropped from 67% to 63.5% (-3.5%). Fortunately, sUSDe’s APY fared better, increasing to 9.15%, slightly above the savings rate of USDs (8.75%). USDe recorded the largest daily selling volume at $203M on February 21 on the secondary market, offset by a buying volume of $180M. Chart showing sUSDe’s and USDe’s trading volume in February. Source: @tomwanhh (X/Twitter) Although USDe briefly dipped to $0.98 on February 21, the median DEX price and price peg held steady at $0.9993. Bybit is one of the key venues for USDe, so the USDe balance held in CEXs dropped from 580M to 388M (-33%) after the hack. However, the simultaneous increase into the Ethereal DEX early deposit vault indicated investors still had confidence in the Ethena network and Ethena Labs. Good news from South Korea Ethena Labs did not come out of the Bybit hack unscathed, but it mitigated the damage well below the worst-case scenario. Already, Ethena Labs has assured investors all is well and even debuted its Chaos Labs partnership to provide increased transparency. On another note, earlier today, Bithumb, the leading exchange in South Korea with the largest number of subscribers in 2024, announced that it had added $ENA to the KRW market and launched an airdrop event linked to the announcement. According to details from the exchange’s blog, those who trade ENA for two consecutive days will receive ENA. The blog also contained details about what $ENA is and some restrictions put in place to provide a safe trading environment. Some of the restrictions include how buying orders are restricted for 5 minutes after the start of trading while selling orders are restricted for 5 minutes after the start of trading at prices less than -10% of the standard price and more than +100% of the standard price. Automatic orders are only possible after the first transaction after the start of trading.