Ethena Labs has integrated Chaos Labs’ data authenticity technology, Edge Proof oracles, to strengthen the risk management framework for its synthetic dollar token USDe.

Edge oracles will independently verify the total dollar value of the USDe’s reserves and the reserve coverage of USDe’s supply and confirm that reserves are governance-approved and delta-neutral. Chaos Labs shared the announcement exclusively with CoinDesk.

USDe, a synthetic stablecoin, maintains a soft peg with the U.S. dollar through an automated delta-hedging strategy that shorts bitcoin and ether perpetual futures to offset changes in the prices of these cryptocurrencies.

The synthetic stablecoin experienced volatility over the weekend, falling to 0.982 against tether and 0.988 against USDC, per Kaiko, amid fears that the protocol has multi-million dollar exposure to Bybit’s ether (ETH) derivatives market. The exchange was hacked late Friday, with a malicious entity draining over $1 billion in ether.

The so-called de-peg, however, was short-lived as Ethena assured investors that all assets backing USDe were held off-exchange and its reserve fund was more than enough to compensate for any losses from the Bybit exploit.

The integration with Chaos Labs adds another layer of credibility to USDe’s reserves, ensuring they stay secure and transparent.

The Edge Proof of Reserves (PoR) oracles will constantly monitor the reserve levels of tokens and check the collateral backing them. This is done by smoothly integrating off-chain data from custodians and centralized exchanges into the on-chain environment, ensuring scalable and robust support for institutional-grade applications.

The integration also provides automated alerts to notify users of any data anomalies or if reserve levels fall below the required thresholds. Verified data is publicly displayed on Ethena’s transparency page and attestor interfaces, keeping stakeholders informed.

«This integration ensures continuous, independent verification of reserves, fostering greater transparency and security for all users. By leveraging real-time, tamper-resistant data, Ethena reinforces its commitment to a robust and reliable synthetic dollar,» the announcement said.

Chaos Labs’ Edge oracle leverages zero-knowledge proofs to ensure security and privacy while providing real-time and transparent data verification, including for reserves held off-chain or across different blockchains.

These oracles have secured over $70 billion in volume, delivering risk management to decentralized finance (DeFi) giants like AAVE, Jupiter, GMX, and Tether.

Bitcoin (BTC) dipped below $92,000 during the overnight trade, revisiting levels that have proven resilient multiple times since December. However, the latest move comes with a notable uptick in perpetual futures open interest and price action that indicates seller dominance.

The number of open futures bets or open interest in the BTC/USDT pair trading on Binance rose by roughly 12,000 BTC (worth over $1 billion) as BTC’s price fell from $96,000 to under $92,000, according to data tracked by Coinglass.

An uptick in open interest alongside a price decline is said to represent an influx of bearish short positions. In other words, traders likely opened fresh shorts as the price dropped, perhaps in anticipation of an extended sell-off.

The cumulative volume delta (CVD) across both futures and spot markets on the exchange was already negative and has deepened further with the price drop, indicating that selling pressure has outpaced buying activity.

The CVD measures the net capital flows into the market, where positive and rising figures indicate buyer dominance, while negative values reflect increased selling pressure.

BTC chalks out bearish marubozu candle

Bitcoin dropped 4.86% on Monday with sellers dominating the price action throughout the day.

That’s reflected in the shape of Monday’s candlestick, which features negligible upper and lower shadows and a prominent red body. In other words, opening and closing prices are almost the same, a sign buyers had little say in the price action.

Technical analysts categorize this as a bearish marubozu pattern. The appearance of the bearish candlestick while prices hover below key 50- and 100-day simple moving averages (SMA) may embolden sellers, potentially leading to deeper losses.

Support (S) is seen near $89,200, the Jan. 13 low, followed by the 200-day SMA at $81,661. On the flip side, the Feb. 21 high of around $99,520 is the level to beat (R).