Tim Copeland, editor-in-chief of The Block, wrote that Ethena is a complex project. On the surface, it looks like a high-yield stablecoin, similar to the services provided by UST. But in fact, it is more like a combination of a structured product and a stablecoin, and its potential difference may be reflected in whether the token is pledged.
When Tim Copeland spoke with Ethena founder Guy Young in February, Guy Young said that the worst case scenario facing the project is counterparty risk, which refers to the risk that funds stored with institutional-grade custodians such as Fireblocks and Copper may be lost for some reason. At the time, he said: "I think the worst thing is if one of the institutional custodians has a big problem and actually loses the assets completely." He expressed his willingness to discuss possible problems.
In addition, Ethena is much more transparent and open about its potential risks. For example, on its FAQ page, it lists in detail the seven major risks facing the project, from funding rates to exchange failures and even regulatory issues (given that the project is providing income through the efforts of a few third parties, this seems worth acknowledging). It explores each issue in detail and explains how to monitor certain risks.
Copeland concluded: “So while the question of Ethena’s risk profile is complex and has generated a lot of controversy on the X platform, I was impressed that at least this time, the risks were discussed in an open and transparent manner — no critical articles were criticized for pointing out potential flaws. You could say that’s progress.” (The Block)
Miyuki
