Ethena’s April 2025 Governance Update

General
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Welcome to the second installment of Ethena’s monthly governance update, covering all major developments in April 2025. This report highlights protocol improvements, community growth, governance actions, treasury updates, and broader ecosystem developments.

Key Takeaways

  • Transparency Boost: Ethena launched a USDe Proof of Reserves (PoR) system with independent attestors (Harris & Trotter, Chaos Labs, LlamaRisk, Chainlink) to provide weekly on-chain verification of USDe’s collateral, strengthening trust in the stablecoin’s backing Link.

  • Ecosystem Expansion:

    • Ethena continued executing its 2025 “Convergence” roadmap. In April the team advanced Converge, a new Layer-1 blockchain (built with Celestia & Arbitrum tech in partnership with Securitize) focused on real-world assets and digital dollars Link. Ethena also announced a major partnership with TON to bring USDe and sUSDe to Telegram’s users Link.

    • eUSDe and sUSDe PTs (Pendle) went live following Aave’s snapshot votes Link and Link. Pendle PT on Aave totals $450M across 2 markets. This marks the first time that Pendle PT tokens are supplied as collaterals on Aave after a few days since launch.

  • Governance & Adoption: Ethena engaged with external governance to expand USDe’s reach. USDtb’s listing on Aave passed a community Snapshot vote with broad support Link with another vote to pass by May 10 before USDtb becoming a borrowable asset on Aave v3 Link. This could deepen stablecoin liquidity and create new use cases such as looping strategy for sUSDe via USDtb borrow (See the diagram below for how looping works within Ethena protocol mechanism).

  • Community Rewards: Ethena concluded “Season 3” of its rewards program, with 3.5% of ENA’s total supply (~$178.5M) distributed to users on May 1 Link. This brings total community distribution to ~13.5% of supply.

  • Treasury & Resilience: The protocol remained over-collateralized (~101% backing ratio) throughout April, with ~$4.7B USDe in circulation at month end Link. The Reserve Fund holds about $61M and saw no draws in April. There is however a proposal to reduce the size of the Fund by $5M to correspond to the current USDe Supply and to increase its backing Link.

  • Cross-Chain Integration: The Ethena app integrated LI.FI’s swap/bridge infrastructure, making it easier for users to acquire USDe or ENA across 14+ chains in one click Link. This update (along with new fiat on-ramp options) simplifies bringing funds into Ethena’s ecosystem.

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Protocol Updates

  • USDe Proof of Reserves Launch: Ethena deployed a comprehensive Proof of Reserves (PoR) system for USDe. This on-chain attestation mechanism, developed with third-party attestors, provides weekly proofs of USDe’s backing Link. Users can view real-time PoR results on Ethena’s Transparency dashboard and partners’ sites.

  • Cross-Chain Swaps and Fiat On-Ramps: Ethena improved accessibility by integrating LI.FI into the dApp. This integration lets users seamlessly swap into USDe or ENA from 14+ supported blockchains with a single transaction. Previously, moving assets into Ethena’s ecosystem from other networks required multiple steps; now, holders of major stablecoins on chains like Arbitrum, Optimism, or Solana can convert directly into USDe in one click.

  • Protocol Metrics: Ethena’s core stablecoin USDe remained fully collateralized throughout April, maintaining a backing ratio around 101% (assets vs. liabilities). The total USDe supply is holding steady at ~4.7 billion with ~70% in liquid stables (see chart) as funding rates average below 2% in April.

  • Converge Blockchain Progress: Converge is Ethena’s Layer-1 EVM-compatible chain purpose-built for tokenized TradFi assets and stablecoins, leveraging technology from Celestia (data availability) and Arbitrum. In April, the team confirmed that a developer testnet and technical documentation will roll out in the coming weeks, with mainnet launch on track for Q2 2025 Link. USDe and USDtb will function as native gas tokens on Converge, creating new utility for Ethena’s stablecoins. This initiative – executed in partnership with Securitize – aims to bridge DeFi with institutional finance on a dedicated network.

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Community Metrics

  • Rewards Program – Season 3: Ethena’s “Season 3” rewards campaign concluded on March 23, and the distribution took place in early May. This season rewarded protocol users based on their activity and staking over the past six months. On May 1, the Ethena Foundation distributed 3.5% of the total ENA supply as rewards, equivalent to ~$178.5 million at the time of distribution Link. The top 2,000 participating wallets received a portion of their rewards as time-vested tokens, with vesting requirements eased compared to prior seasons. Smaller participants received their ENA rewards unlocked. This distribution (the second large airdrop after the initial launch) brings the cumulative community allocation to ~1.5 billion ENA (~13.5% of total supply) across Seasons 1–3.

  • Transparency & Communication: In addition to the new on-chain PoR feeds, Ethena published its 13th monthly custodian attestation report Link, with independent custodians (Copper, Ceffu, Cobo) verifying that all assets backing USDe are held off-exchange in secure custody. These monthly attestations, now complemented by weekly on-chain proofs, give the community confidence in the protocol’s reserves.

Governance Participation

  • Risk Committee Activity: The Ethena Risk Committee (ERC) is composed of six organizations (Block Analitica, Blockworks Advisory, Llama Risk, Untangled, Steakhouse Financial, and Ethena Labs Research). Smaller working groups (Sub-committees) are now handling specific domains – for example, a Backing Assets sub-committee (Block Analitica, Untangled with Steakhouse recused) evaluates a new collateral proposal regarding aUSDC/T, and a Protocol Integrations sub-committee (Blockworks Advisory, Untangled) focuses on partnership integration such as USDtb lending on Aave. The Reserve Fund Sub-committee is handling the reserve fund proposal.

  • On-Chain Governance (Snapshot): community members and the team collaborated with Aave’s governance process to support USDtb’s listing on Aave. In April, the USDtb Snapshot passed Link. This moves the proposal into Aave’s final stage: an on-chain AIP for formal approval and deployment. Aave users will be able to borrow USDtb, which could deepen liquidity and create new use cases such as looping strategy for sUSDe via USDtb borrow. ERC Integration sub-committee will then post recommendations in response to a community proposal on this forum.

  • Proposal Pipeline: Several governance proposals and discussions were active in April on Ethena’s forum:

    • Aave aUSDC/aUSDT as USDe Collateral: A community proposal to add aUSDC and aUSDT (interest-bearing tokens) as accepted backing assets for USDe is under formal review. The ERC’s Backing Assets subcommittee (Untangled, Blockworks Advisory) have drafted analyses and recommendations. These will be posted once the Aave’s community has finalised an AIP, similar to that of USDtb.

    • Reserve Fund’s allocation of excess: This proposal suggests reducing the Reserve Fund size by $5m to mirror the reduction in USDe supply from $6B to $4.7B and the ability to move more of the backing assets into stablecoins during low funding environments. It is also prudent, according to the proposal, to revisit overall sizing requirements to reflect Ethena’s ability to dynamically allocate more of the backing into stablecoins in negative funding environments, mitigating the potential impact of negative funding on the Reserve Fund assets and the backing as a whole. ERC Sub-committee on Reserve Fund (Llamarisk, Blockworks) have started evaluating the proposal Link

Ecosystem Activity

  • Partnership with TON (Telegram): Ethena Labs and the TON Foundation announced a strategic partnership to bring USDe and sUSDe to the TON blockchain – thereby offering Ethena’s stablecoins to Telegram’s user base Link. Ethena will integrate its sUSDe into TON as a native asset (branded tsUSDe for “TON Staked USDe”), and also make the base USDe token available on TON via the LayerZero bridge. The TON integration is slated to go live in stages in May onwards.

  • BlackRock BUIDL, which backs USDtb, continued to grow to $2.6B AUM by the end of April (grew by nearly $1bn since March). Ethena’s holdings of $1.3 B makes it one of the largest single participants (>50% ownership of the BUIDL token supply) Link.