The Risk Committee’s mandate is to generally identify, evaluate, and manage risk within the ecosystem. It will provide input and oversight with respect to components such as (but not limited to):
i) Diversification across delta hedging venues;
ii) Types of backing assets to accept;
iii) Vetting suitability of and approving new venues for delta hedging;
iv) Vetting suitability of and approving new off-exchange custody partners;
v) Allocation of protocol revenue between Reserve Fund, sUSDe contract, and other buckets (if relevant); and
vi) Evaluating and implementing size and/or risk limits by hedging venue.
Ethena Labs Research
Ethena Labs Research will sit on the committee initially as a nonvoting member (though it may make proposals) and will receive no compensation.
Its seat will be subject to confirmation or replacement at the conclusion of its term as any other member. If replaced, the replacement member will become a voting member.
The Ethena Labs Research team has no voting or veto power in committee proposals and can only propose matters to other members.
Election Process
The first Ethena Committee election will be 6 months after the rollout of the Risk Committee. At the end of the initial term, all Risk Committee member seats will be up for confirmation or replacement.
Following this initial vote, 3 Risk Committee member seats will be up for confirmation or replacement every 6 months.
If the potential committee member accepts the nomination the Ethena Foundation will conduct the KYC/KYB screening of the candidate. The members of the relevant Committee whose seats are not subject to the present quarterly vote will also screen said candidates for suitability. All nominees must have passed KYC/KYB screening before they can earn any votes.
Committee Proposals
A member of a Committee wishing to make a specific change is required to propose the particular changes or decisions in the governance forums.
Following posting, a seven-day deliberation period begins, during which the members of the relevant Committee discuss the merits of the proposal.
At the end of the deliberation period, a vote will be held amongst all voting members of the Committee. All changes require unanimous approval of the voting members.
If no veto power is used from other members, the vote will be successful and will be put forward as a proposal to the Foundation.
If a member vetoes a proposal, they are encouraged to provide a detailed response in this forum as to why they rejected a proposal, and what terms need to be changed for them to approve that proposal.
The Risk Committee Category
This category will be used for all proposals and public discussions involving the Risk Committee.