Perpetual futures markets just underwent their largest notional liquidation event ever, with most of the volatility concentrated in ETH markets. It marks the ninth drawdown of at least one billion dollars in ETH open interest since Ethena launched, and the second drawdown over $2 billion. In just 24 hours, ETH open interest fell by $2.3bn, the largest 24hr drawdown ever.

This post walks through the history and evolution of the allocation strategy for USDe’s backing starting from launch through today. The makeup of the assets backing USDe has adapted over time based on observations and market feedback in order to mitigate risk, improve liquidity, and provide diversified revenue sources for the protocol.