ByBit insolvency rumors highlight Ethena’s centralization
Rumors of problems with Ethena ’s $2.5 billion so-called stablecoin USDe have been fueled this week by reports that giant exchange ByBit — where Ethena trades some of its assets — is experiencing financial problems, possibly even insolvency . Some claim that the rumors were attributable to a dashboard error at Arkham while others believed them to be true. Observers noted a small amount of exchange outflows relative to ByBit’s total assets. ByBit itself has since refuted any claims of insolvency. Protos reached out to the exchange for comment but at time of publication has not received a response. Over the last seven days, neither the price of Ethena’s proprietary token ENA nor its stablecoin USDe have declined in price. For its part, Ethena claims to hold all of its collateral off-exchange at third-party custodians like Copper or Cobo. Although it clears trades via crypto exchanges, it claims to hold the collateral backing its positions, including ByBit perpetual futur...