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Ethena Enhances Capital Efficiency and Asset Security Through Cobo SuperLoop

Ethena Enhances Capital Efficiency and Asset Security Through Cobo SuperLoop

Singapore - February 21, 2024 - Ethena, the developer of USDe, a synthetic dollar on Ethereum, is pleased to announce its strategic partnership with Cobo to leverage Cobo SuperLoop’s off-exchange custody and settlement network. Ethena will hold staked Ethereum assets in secure MPC wallets provided by Cobo and utilize Cobo SuperLoop to mirror funds 1:1 on exchanges. This adds further robustness to the Ethena off-exchange architecture, which eliminates counterparty risk associated with opening positions on centralized exchanges.

About Ethena

Ethena has launched its decentralized synthetic dollar protocol on Ethereum, offering a crypto-native form of money independent of traditional banking. Their main offering, the USDe synthetic dollar, aims to be the first censorship-resistant, scalable, and stable digital medium of exchange.

Ethena enables certain users to utilize ETH or liquid staking tokens such as stETH to mint USDe. The synthetic dollar is supported by delta-hedging staked Ethereum, providing full collateral backing without sacrificing yield. USDe acts not only as a medium of exchange but the backing also enables an accessible and permissionless dollar-denominated savings tool known colloquially as an 'Internet Bond'.

Cobo SuperLoop x Ethena

When users mint USDe, Ethena hedges the delta-risk of the associated assets held within the Cobo SuperLoop solution on Bitget through its internal hedging mechanism. This is done by initiating additional short derivative positions on exchanges. Instead of a direct deposit of collateral such as stETH on exchanges, funds are seamlessly mapped within the Cobo Custody interface. This automated process supports a 1:1 collateral mirroring on Bitget, effectively alleviating the counterparty risks while also enhancing Bitget's capacity to serve institutional clients.

As the world's first off-exchange custody and settlement network, Cobo SuperLoop allows institutional traders to safekeep their funds using Multi-Party Computation (MPC)-based wallets provided by Cobo while trading on exchanges, ensuring that they maintain full control of their funds at all times. This mechanism eliminates exchange counterparty risk and significantly alleviates potential security concerns and misuse of funds, in light of the trust issues associated with CEXs post FTX.

Guy Young, CEO and Founder of Ethena Labs, commented, "We are thrilled to partner with Cobo who has demonstrated a spotless track record of serving their users and investors with the highest standards of security through the years. Their focus on providing institutional-grade infrastructure as a top priority aligns exactly with our approach.”

Changhao Jiang, CTO and Co-Founder of Cobo, commented, "The collaboration marks a significant milestone for Ethena and Cobo, highlighting our collective commitment to establishing new benchmarks in fund security and trading efficiency for our users."


About Ethena Labs

Ethena is a synthetic dollar protocol built on Ethereum that will provide a crypto-native solution for money not reliant on traditional banking system infrastructure, alongside a globally accessible dollar denominated savings instrument - the 'Internet Bond'.

Ethena's synthetic dollar, USDe, will provide the first censorship resistant, scalable and stable crypto-native solution for money achieved by delta-hedging staked Ethereum collateral. USDe will be fully backed transparently onchain and free to compose throughout DeFi.

USDe peg stability is supported through the use of delta hedging derivatives positions against protocol-held collateral.

The 'Internet Bond' will combine yield derived from staked Ethereum as well as the funding & basis spread from perpetual and futures' markets, to create the first onchain crypto-native 'bond' that can function as a dollar-denominated savings instrument for users in permitted jurisdictions.

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About Cobo

Cobo is a globally trusted leader in digital asset custody solutions. As the world’s first omni-custody platform, Cobo offers the complete spectrum of solutions from custodial wallets to non-custodial wallets including MPC and smart contract wallets, as well as Wallet-as-a-Service, a DeFi management platform (Argus), and an off-exchange settlement network (SuperLoop). Trusted by over 500 institutions worldwide to safeguard billions in digital assets, Cobo inspires confidence in digital asset ownership by enabling safe and efficient management of digital assets and interactions with Web 3.0. Cobo is ISO27001 certified, SOC2 Type 1 and Type 2-compliance-certified, and licensed in 4 jurisdictions.

For more information, please visit www.cobo.com.