Ethena Labs Enhances USDe Security with Chaos Labs’ Edge Proof Oracles

Ethena Labs has integrated Chaos Labs’ Edge Proof oracles to strengthen the risk management framework of its synthetic stablecoin, USDe. The integration enhances transparency by independently verifying USDe’s total reserves, reserve coverage, and governance-approved collateral.

USDe maintains a soft peg to the U.S. dollar using an automated delta-hedging strategy, shorting Bitcoin and Ethereum perpetual futures to offset price fluctuations. However, over the weekend, USDe briefly dipped to 0.982 against Tether (USDT) and 0.988 against USDC amid concerns over potential exposure to Bybit’s ether (ETH) derivatives market following a $1 billion exploit. Ethena Labs assured investors that its reserves were off-exchange and fully secure, leading to a swift recovery.

Chaos Labs’ Edge Proof of Reserves (PoR) oracles continuously monitor reserve levels, integrating off-chain custodian and exchange data into an on-chain environment. This ensures scalable, institutional-grade security while providing real-time alerts for anomalies or reserve deficiencies. Verified reserve data is publicly accessible on Ethena’s transparency page, reinforcing trust.

Using zero-knowledge proofs for enhanced security and privacy, Chaos Labs’ oracles have secured over $70 billion in DeFi volume, serving major platforms like AAVE, Jupiter, GMX, and Tether. The partnership further solidifies Ethena’s commitment to a transparent and reliable synthetic dollar, ensuring robust protection against market volatility.