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  • Ethena Overview
  • How USDe Works
  • Genesis Story
  • Alternatives: Existing Stablecoins
  • Size of the Opportunity
  • USDtb
  • Ethena Network
  • ENA
    • Tokenomics
  • Video Guides
    • How to Buy USDe
    • How to Stake USDe
    • How to Stake ENA
    • How to [Un]lock positions
  • Solution Overview
    • USDe Overview
      • Delta-Neutral Stability
      • Delta-Neutral Examples
      • Scalability
      • Censorship Resistance
      • Regulatory Compliance
    • Protocol Revenue Explanation
      • Historical Examples
      • Rewards Mechanism Explanation
      • sUSDe Rewards Mechanism
    • Underlying Derivatives
      • Futures vs Perpetuals
      • Inverse vs Linear Contracts
      • Basis Spread
    • Peg Arbitrage Mechanism
    • Liquid Stables: Dynamic Allocation
      • Current Allocation Approach
    • Scenario Analysis
    • Risks
      • Funding Risk
      • Liquidation Risk
      • Custodial Risk
      • Exchange Failure Risk
      • Backing Assets Risk
      • Stablecoin-Related Risks
      • Margin Collateral Risks
    • Governance
      • Risk Committee
  • Backing Custody & Security
    • Overview
      • Off-Exchange Settlement in detail
      • Copper Clearloop Case Study
    • Real-Time Dashboards
  • Solution Design
    • Overview
      • Github Overview
    • Key Trust Assumptions
      • Matrix of Multisig and Timelocks
    • Minting USDe
      • Order Validity Checks
      • User Security Measures
      • Mint & Redeem Key Functions
      • Mint and Redeem Contract V2
    • Staking USDe
      • Staking Key Functions
      • User Security Measures
    • Use of Oracles
    • Hedging System
      • Internal Services
      • Managing Risk from dependencies
    • Reserve Fund
    • Key Addresses
    • Backing Asset Custody
  • API Documentation
    • Overview
  • Resources
    • Custodian Attestations
    • FAQ
    • Data Repository
    • USDe + sUSDe Custodian Availability
    • Audits
    • Media Assets
    • General Risk Disclosures
    • Privacy Policy
    • Terms of Service
    • USDe Terms and Conditions - EEA
    • USDe Terms and Conditions - Non EEA
    • USDe Mint User Agreement - Non EEA
    • Testnet
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  1. Solution Overview
  2. USDe Overview

Censorship Resistance

How USDe furthers censorship resistance

Assets backing USDe remain in "Off-Exchange Settlement" institutional grade solutions at all times. The only time collateral flows between custody and exchange is to settle funding or realized P&L.

Ethena utilizes "Off-Exchange Settlement" (OES) providers to hold backing assets. This enables Ethena to delegate/undelegate backing assets to centralized exchanges without being exposed to exchange-specific idiosyncratic risk.

While using an OES provider requires a technological dependence upon the OES provider, it does NOT mean counterparty risk has simply been transferred from the exchange to the OES provider. OES providers typically, where not using an MPC solution, employ a bankruptcy-remote trust framework to ensure the OES provider's creditors have no claim to the assets. In the case of an OES provider failing, these assets outside the provider's estate and not exposed to the credit risk of the custodian. Empirically, Ethena's integrated providers for custody services have never lost a dollar of users funds compared to the $7bn lost in DeFi hacks, and >$15bn in CeFi insitutions last cycle.

Last updated 5 months ago

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