Ethena's USDe tackles collateral concentration risk through a diversified, multi-faceted strategy. By spreading collateral across Bitcoin, Ethereum, Solana, and stablecoins like USDT, USDC, and USDS, Ethena reduces reliance on any single asset. The protocol employs Off-Exchange Settlement (OES) providers like Copper, Ceffu, and Cobo, ensuring assets are held in bankruptcy-remote trusts to mitigate custodial risk. Ethena dynamically allocates collateral across multiple exchanges (Binance, Bybit, OKX, etc.), limiting exposure to any single venue. A $46.6M reserve fund cushions against negative funding rates, while liquid staking tokens (e.g., stETH) provide additional yield to offset volatility. Regular custodian attestations enhance transparency, and governance allows reallocation to safer assets like UStb if needed. This robust risk management ensures USDe’s stability despite its $3B market cap and rapid growth.