Ethena has extended its temporary suspension of LayerZero OFT bridge operations after the rsETH cross-chain exploit, moving to contain any potential risk to its protocol and users. The company confirmed it has no direct exposure to the compromised asset, but has opted for a precautionary pause while the root cause remains under investigation.
Bridge service paused as rsETH investigation continues
On April 18, Ethena halted activity on its Ethereum mainnet LayerZero OFT bridge, citing uncertainty surrounding a recent exploit of rsETH, a liquid staking token tied to Ethereum. This exploit, which impacted an Aave v3 instance, exposed vulnerabilities in certain cross-chain messaging infrastructures that overlap with Ethena’s own systems.
The initial pause was expected to last about six hours but has since been extended as a root cause analysis remains incomplete. Ethena indicated that operations will stay paused until further clarity is established, prioritizing user safety.
Out of an abundance of caution we are temporarily pausing our LayerZero OFT bridges from Ethereum mainnet until the root cause of the rsETH incident has been identified. We expect the pause to last ~6 hours and will provide updates on this temporary pause as we receive them.
LayerZero acts as the cross-chain communication layer between various blockchains, making it a crucial part of Ethena’s bridged asset infrastructure. By halting activity, Ethena aims to isolate itself from possible undetected attack vectors that may exist until the investigation concludes.
User frustration has grown as the protocol remains inactive, but Ethena maintains its caution-first approach and asserts that the security of cross-chain movement remains paramount at this point.
Proof of reserves and collateral transparency
In parallel to the bridge suspension, Ethena updated its proof of reserves ahead of schedule to assure market participants of its financial stability. The company operates as a decentralized synthetic dollar protocol, best known for issuing the USDe stablecoin, which is overcollateralized via assets such as BTC, ETH, SOL, select stablecoins, and yield-bearing tokens.
The newly published reserve figures confirm more than $5.63 billion in backing for a USDe supply of just under 5.56 billion, establishing a collateralization ratio of approximately 101.20%. Reserve fund holdings exceeded $62 million as of the update.
Attestations to collateral levels and reserves have been independently verified by Chainlink, Chaos Labs, LlamaRisk, and financial firm Harris & Trotter, adding further transparency for users and investors. All assets backing USDe remain within approved management parameters.
As we have not yet received a satisfactory root cause analysis for the rsETH incident, we are extending the temporary pause on the OFT bridge. We understand this is frustrating, but believe this is the prudent step to ensure safe cross-chain movement of your assets.
Ethena’s protocol currently uses a delta-neutral strategy intended to minimize directional risks from wider market moves, providing additional assurance that sudden volatility will not compromise USDe’s stability.
Broader DeFi observers have noted that even projects not directly integrated with compromised assets like rsETH may face indirect risk due to the complex web of cross-chain dependencies. Ethena’s ongoing suspension and transparent reporting reflect a sector-wide focus on limiting contagion threats in decentralized finance infrastructure.
