Founder of Ethena Labs: USDe pegged to USDT is reasonable, minting and redemption did not crash during market turbulence

ChainCatcher news, Ethena Labs founder Guy Young posted on the X platform stating: The oracle attempts to identify two different scenarios, one being a temporary misalignment of secondary market prices, and the other being permanent impairment of collateral, which has never occurred with USDe. The likelihood of such an event happening is much lower for most assets, including USDe. Although DeFi money markets have been criticized for USDe pegging to USDT, it is indeed considered reasonable as it can avoid liquidations caused by temporary price imbalances.

Ethena provides on-demand proof of reserves to a few entities, some of which are also oracle providers, including Chaos Labs and Chainlink. During this week's market turmoil, Ethena's minting and redemption functions did not experience downtime. Price misalignments were observed through major liquidity venues on-chain, such as Curve, Uniswap, and Fluid, with over $9 billion in on-demand stablecoin collateral available for immediate redemption, but the actual usage was only a small fraction.