Ethena Labs Reduces Unrealized PNL Exposure to Bybit to Zero

Ethena Labs has provided an update confirming that its unrealized PNL (Profit and Loss) exposure to the hacked crypto exchange Bybit is now zero.

This update follows an earlier post in which the Ethereum-based synthetic dollar protocol reassured users that its USDe stablecoin had minimal exposure to the incident. Previously, the Ethena team stated that PNL exposure was under $30 million.

Initial Response to Bybit Hack

Ethena Labs had initially stated that it was aware of the situation evolving with Bybit and was continuing to monitor developments. The team noted that all spot assets backing USDe were held in off-exchange custody solutions, including ByBit via Copper Clearloop, to mitigate potential risks.

No Funds Affected

According to the latest update, no funds backing USDe’s spot reserves were held on exchanges, including Bybit. The unrealized PNL exposure to Bybit has been reduced to zero.

Understanding Unrealized PNL Exposure

In financial markets, unrealized PNL exposure refers to the profit or loss an entity may incur on open positions. Also known as floating PNL, it represents the potential gain or loss if all open positions were closed immediately.

Bybit Hack Recap

The Bybit hack resulted in the exploitation of the exchange’s ETH cold wallet for approximately $1.46 billion. Ethena Labs had clarified that less than $30 million in unrealized PNL was tied to Bybit hedge positions, despite USDe remaining fully collateralized at the time.

Reducing Exposure

The Ethena team had noted that the exposure would decrease further in the coming hours. This amount reportedly dropped to $10 million, before eventually reaching zero.

Key Takeaways:

  • Ethena Labs’ unrealized PNL exposure to Bybit is now zero.
  • No funds backing USDe’s spot reserves were held on exchanges, including Bybit.
  • The Bybit hack resulted in the exploitation of the exchange’s ETH cold wallet for approximately $1.46 billion.

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